Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH RAILWAYS (STANSTED) BILL (By Order)

Order for Second Reading read.

To be read a Second time upon Monday 24 February at Seven o'clock.

TEIGNMOUTH QUAY COMPANY BILL (By Order)

COUNTY OF SOUTH GLAMORGAN (TAFF CROSSING) BILL (By Order)

SOUTH YORKSHIRE LIGHT RAIL TRANSIT BILL (By Order)

BEXLEY LONDON BOROUGH COUNCIL BILL (By Order)

SHOREHAM PORT AUTHORITY BILL(By Order)

LONDON DOCKLANDS RAILWAY (CITY EXTENSION) BILL (By Order)

ABERYSTWYTH HARBOUR BILL (By Order)

HARWICH PARKEST ON QUAY BILL (By Order)

MILFORD HAVEN PORT AUTHORITY BILL (By Order)

Orders for Second Reading read.

To be read a Second time upon Thursday 27 February.

Oral Answers to Questions — HOME DEPARTMENT

Civil Defence

Mr. Alexander: asked the Secretary of State for the Home Department when he intends to start providing regular reports to the House on how local authorities are proceeding with their civil defence requirements.

The Minister of State, Home Office (Mr. Giles Shaw): My right hon. Friend will report to the House when the assessment of local authority plans under the 1983 regulations is complete.

Mr. Alexander: Do the reports which have already been made not show that there are profoundly disturbing

weaknesses in some of our civil defence preparations and that the 1983 regulations are widely ignored and flouted? On concluding the assessment, will my hon. Friend consider appointing a civil defence inspector with powers to monitor and direct civil defence regulations?

Mr. Shaw: My hon. Friend is right. There has been, as we expected, a variable response to the questionnaires. We must examine carefully the plans of the 54 county level authorities. My hon. Friend is correct in saying that this will require a lot of follow-up and advice. The civil defence adviser is fully engaged on this task.

Mr. D. E. Thomas: When the Home Secretary reports to the House, will he take care to report on the extraordinary events in the Camarthen district where, apparently, a security firm which has been grant-aided by his Department used dogs and violence against members of the civilian population?

Mr. Shaw: I am aware of that unfortunate incident. I understand that an inquiry is taking place. The hon. Gentleman will, of course, receive a report in due course on the incident.

Sir John Farr: Is my hon. Friend aware that some local authorities—nearly all of them Labour—seem to think that civil defence begins and ends by erecting a notice on the speed limit sign saying, "Nuclear Free Zone"? Will my hon. Friend point out to them the error of their ways? Will he take the opportunity to point out to the ratepayers what some of these Labour-controlled city councillor are doing?

Mr. Shaw: My hon. Friend is right. There is plenty of advertising of that myth. No doubt those local authorities will be the first to close the radiology departments in their hospitals if they pursue that policy.

Crime Prevention

Mr. Maclean: asked the Secretary of State for the Home Department if he will make a statement on the outcome of the recent seminar on crime prevention.

The Secretary of State for the Home Department (Mr. Douglas Hurd): The seminar agreed on a range of initiatives by industry, commerce and the Government. These cover four areas—autocrime, residential burglary, aspects of violent crime and crime in the workplace. I will chair a follow-up seminar in the summer to take stock of progress. I believe that there is huge scope for local schemes of many different kinds of crime prevention, and we are working hard to encourage these.

Mr.Maclean: I am obliged to my right hon. Friend for that reply. Is he aware that, for this vital area of Government activity to succeed, it must involve not only Home Office Ministers and boffins but the whole community? What steps is he taking to get across the message that we must involve insurance companies, motor manufacturers, builders, and so on as well as small community groups, in this vital aspect of crime prevention?

Mr. Hurd: My hon. Friend is right. That was the main purpose of the seminar. We shall push that message through. My hon. Friend will be glad to know that the magpie television advertisements, which we showed some time ago, were followed in London and the midlands


where they were shown by an 11 per cent. decrease in burglaries in the following quarter. We are extending that programme to the north.

Mr. Roy Hughes: I draw the right hon. Gentleman's attention to early-day motion 468 concerning the case of Peter William Jones, who yesterday in Newport Crown court received a life sentence. Does the right hon. Gentleman appreciate that many people in Newport and elsewhere cannot understand why a man with such a record of violence was allowed to roam the streets and eventually to rape a seven-year-old girl? Will the right hon. Gentleman call for an early review of sentencing and appeal procedures?

Mr. Hurd: The hon. Gentleman knows that I cannot, and do not intend to, comment on sentences passed in court by the independent judiciary. I shall look into any aspects of the case which fall within my responsibility.

Mr. Sackville: In view of the clear evidence that shows that a vast proportion of crime is preventable by the public, I welcome the fact that one of the five local crime prevention projects is to be in Bolton. Will my right hon. Friend confirm that the lessons learnt there will be used to the benefit of the rest of the country and that adequate resources will be provided?

Mr. Hurd: Yes, indeed. I entirely agree. I was in Bolton not long ago, as my hon. Friend knows. I found considerable interest and enthusiasm in the fact that Bolton had been chosen for that pioneering project. I hope that all involved in Bolton, whatever their party political opinions, will join in that effort for the protection of the public.

Mr. Evans: Does the Home Secretary accept that the best way to cut the appalling level of crime is to cut the appalling level of unemployment? Does he accept that one way of cutting the appalling level of unemployment is to accept the programme put forward by the Employment Select Committee, which would immediately take 750,000 people out of the dole queue?

Mr. Hurd: I do not accept that, because 95 per cent. of the crime committed is crime against property. A large percentage of that is opportunist—not prepared long in advance. Crime prevention could substantially cut those figures if it were better applied.

Mr. Stokes: As so much crime is involved with motor cars, will my right hon. Friend consider bringing in regulations to ensure that in future all British car manufacturers produce cars with burglar-proof locks?

Mr. Hurd: Yes, indeed. My hon. Friend is on to an excellent point. One of the results of the seminar at 10 Downing street was an agreement that a British standard for car security would be prepared by the British Standards Institution.

Mr. Kaufman: Will the Home Secretary arrange to have published the letter which the Prime Minister's office has sent to all the participants in the so-called crime seminar last month, from which it will be plain to anyone who reads it that the Government are taking not one firm action and are spending not one penny of new money on crime prevention? That curious event at Downing street was less a seminar than an episode from "Spitting Image". Will the Home Secretary and the Prime Minister now

abandon those publicity stunts and gimmicks and do something positive and tangible to deal with the record crime wave over which they are presiding?

Mr. Hurd: I am amazed that the right hon. Gentleman should make that mistake. Does he realise how many people in Manchester and everywhere else suffer from opportunist crime which can be prevented? The general secretary of the Trade Union Congress, Mr. Norman Willis, was at the seminar. He spoke to us warmly of the way in which we should try to enlist general support for crime prevention. That was the purpose of the seminar, and it is the purpose of the letter to which the right hon. Gentleman referred.

Football Matches (Private Boxes)

Mr. John Mark Taylor: asked the Secretary of State for the Home Department what representations he has received about the incidence of drink-related disorderly behaviour in private boxes at football matches.

Mr. Giles Shaw: My right hon. Friend has received representations from a number of right hon. and hon. Members, and others, to the effect that the controls on the sale and possession of alcohol in executive boxes should be relaxed. As he said in his statement to the House on the Popplewell report, we are awaiting further information on the financial aspects from the football authorities. We shall report our conclusions to the House while the Public Order Bill is before Parliament.

Mr. Taylor: Will my hon. Friend accept that I have attended such boxes from time to time? I have never witnessed any violence, fighting or rioting. If indeed the incidence of such disorder is nil, and if the prospect of such disorder is nil, what is his alcohol prohibition guarding against?

Mr. Shaw: My hon. Friend is right. There is no implication that hooliganism starts in executive boxes. We recognise that these are a salubrious part of most grounds, but my hon. Friend must realise that the alcohol legislation we put through last summer was designed to impose a number of restraints affecting all persons attending football matches. We are now awaiting an assessment by the clubs of the losses that they may have incurred by virtue of the restraints on executive boxes. That is the matter we shall now deal with.

Mr. Allan Roberts: If Labour voters outside the executive boxes, looking in through the glass screens, could see Conservative voters drinking champagne when those outside were prevented from buying cans and bottles of ale in the ground, would that scenario not cause some anger among some of the football supporters?

Mr. Shaw: I have no doubt that it might. I think that the hon. Gentleman should have a word with the chairman of Liverpool football club to see whether he follows the same line of argument.

Mr. Hicks: Does my hon. Friend not agree now, as some of us tried to point out on Second Reading, that this total ban is having an adverse effect, particularly on the smaller football clubs? Therefore, will he look again, as quickly as possible, at that problem, specifically in the case of those smaller clubs which have an excellent record of crowd control and non-violence?

Mr. Shaw: I fully understand my hon. Friend's point of view, and that is why my right hon. Friend made it clear that we would be prepared to review it during the passage of the Public Order Bill. I must remind my hon. Friend and the House that in the discussions which my hon. Friend the Parliamentary Under-Secretary of State for the Environment, who has responsibility for sport, and I have with the football authorities, it is essential to know the scale of the problem with which they are currently faced so that we can make a proper assessment.

Mr. Frank Cook: Do not the protestations coming from the Government Benches give a clear example of the standard attitude of the Government? They want to lay down the law for the masses but then claim a personal exemption for themselves.

Mr. Shaw: No, that is far from the truth, and I am sure that the hon. Gentleman will understand that it is not true. We are concerned about the equity in the legislation and the extent to which clubs, large and small, may be put at risk. That could occur in Middlesborough and Hartlepool, just as much as in Liverpool or at Everton.

Voluntary Bodies (Funding)

Mr. Meadowcroft: asked the Secretary of State for the Home Department what recent representations he has received from voluntary bodies funded by his Department concerning their future funding.

The Minister of State, Home Office (Mr. David Waddington): Representations have beeen received from the National Association of Victim Support schemes, the National Marriage Guidance Council, Community Transport, the United Kingdom Immigrants Advisory Service, the British Refugee Council, the Apex Trust, New Bridge and several local organisations concerned with the after-care of offenders.
Two experimental overnight shelters for alcoholics whose Home Office funding was always planned to end this year — St. Anne's shelter, Leeds and the Birmingham wet shelter — have also made representations.

Mr. Meadowcroft: Is the Minister aware that the development of genuine collaboration between voluntary bodies and statutory authorities depends on a consistency of funding? Will the Minister accept that the problem which local authorities have faced with rate-capping penalties plus the abolition of the metropolitan counties has harmed that collaboration? Will the Minister accept, given the long list of bodies he has mentioned, that there is a great need for his Department to look at the consistency of funding at least to get them over the hump of the abolition of the metropolitan counties?

Mr. Waddington: I cannot agree with what the hon. Gentleman said at the beginning of his question. On the matter of abolition, the Government, as the hon. Gentleman knows, have taken a number of measures to help London boroughs and metropolitan districts to continue funding worthwhile voluntary bodies. Grant-related expenditure assessments have taken account of the new responsibilities of boroughs and districts. There is new statutory machinery to facilitate collective grant-giving, and there is the additional financial support for inherited local projects.

Mr. Alan Howarth: Does my hon. and Learned Friend agree that if the Government were to enlarge the scope for donations to charities to be made deductible against income tax and corporation tax, one of the advantages would be that the organisations would be funded more in proportion to the direct public support that they can enlist than at present, and, to that extent, questions about their future funding would be taken out of the political sphere?

Mr. Waddington: I hear what my hon. Friend says, but it goes wide of the question and is not a matter for me.

Mr. Corbett: Does the Minister accept that, despite the recent welcome increase in funding for the victim support schemes, at local level many worthwhile schemes are grossly under-funded? Does he share the view, which is widely held in the House, that far too small a proportion of the total law and order budget is directed at victims?

Mr. Waddington: This year's grant for the National Association of Victim Support schemes is more than double the grant made last year, and next year it is intended for the first time to provide grants to some local schemes which have particular financial difficulties. I am sure the hon. Gentleman will acknowledge that that is real help from the Government.

Mrs. Currie: Is my hon. Friend aware that Turning Point, the drugs and alcohol rehabilitation charity which runs services in Derby, Birmingham and elsewhere, has been trying extremely hard to raise private funding for its work but has been finding it extremely difficult because businesses consider that they have already paid through taxation? Will he, therefore, take seriously the remarks of my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth), and urge his colleagues in the Cabinet and elsewhere to realise that if we can create an "American regime", in which taxation is set against charitable donations, we can help such bodies?

Mr. Waddington: My right hon. Friend the Chancellor of the Exchequer will no doubt note all that my hon. Friend has said.

Crime Prevention

Mr. Willie W. Hamilton: asked the Secretary of State for the Home Department what further initiatives he intends to take to combat the continuing escalation in the crime rate.

Mr. Yeo: asked the Secretary of State for the Home Department if he will make a statement on progress in reducing violent crime.

Mr. Hurd: Recorded crime has been steadily increasing for 30 years. Our strategy for fighting crime is practical and realistic. Despite the misguided indignation of the right hon. Member for Manchester, Gorton (Mr. Kaufman), we shall pursue vigorously the proposals arising from the Prime Minister's crime prevention seminar. A major initiative to deploy the unemployed on crime prevention work in the community programme is to be undertaken. We shall continue to provide the police with the resources and powers to help them in their task, and the courts with adequate powers to deal with offenders.

Mr. Hamilton: As violent crime has increased by more than 60 per cent. since the Government took power in


1979, does the Secretary of State not regret the way in which the Conservative party deceived the electorate at the 1979 and 1983 elections by pretending that these problems have simple solutions? Does he accept with more importance than hitherto that the social causes of crime are real? The deprivation caused by a crumbling housing stock and the massive increase in unemployment are important factors. Does he recognise that unless and until the Government realise those hard facts the figures will continue to escalate?

Mr. Hurd: I agree with the hon. Gentleman that there are no simple answers to crime. We alone among the parties in the House have a practical and realistic strategy for dealing with it. The hon. Gentleman knows that there is endless argument and debate about the root causes of crime. We in the Home Office must deal with the impact of crime by strengthening the police and ensuring that they have the right powers. I agree that at the same time we need to tackle social problems, especially in our inner cities, and we are doing that.

Mr. Yeo: Does my right hon. Friend agree that, whatever theoretical research may purport to show, common sense suggests that people are influenced by what they see on television? If young people in particular are subjected to a constant diet of violent television programmes, there is likely to be an increase in the amount of violent behaviour.

Mr. Hurd: I agree with my hon. Friend. Common sense points us in that direction, and that is why I am anxious that the broadcasting authorities should exert themselves at all times to ensure that the guidelines, which exist and which are known and admirable, are fully respected.

Mr. Dixon: Does the Secretary of State recall that I wrote to him last September about a 15-year-old constituent of mine who went into a shop and bought a lethal crossbow? His hon. Friend the Minister of State answered the letter saying that it was an important matter that they would keep under review. Has anything been done about that incident? Do the Government intend to introduce legislation to prohibit the sale of crossbows or at least to extend licensing, bearing in mind recent incidents?

Mr. Hurd: The hon. Gentleman knows from the letter that he received from my hon. Friend the difficulties in this matter. He is right about the public concern. We are considering the matter carefully and urgently to see whether anything sensible can be done.

Mr. Conway: Will my right hon. Friend give consideration to increasing the establishment for special constables? Is he aware of their important contributon at no charge to the community, in giving their time to patrolling areas in Shrewsbury to great effect and doing a great deal to support the regular police force?

Mr. Hurd: My hon. Friend has made a good point. The number of special constables is increasing. I am in touch with the chief constables and the commission about the matter.

Mr. Dubs: Will the Home Secretary confirm that last year the number of crimes was 3·5 million—an increase of 1 million since the Government took office—and that

last year 2·5 million of those crimes were not cleared up? Is it true that the Government do not have a strategy for catching criminals or for preventing crime?

Mr. Hurd: The hon. Gentleman, who is a fair debater, does himself no credit with the implication that crime started to rise in 1979. That is an absurd proposition. Crime has been rising at a steady rate for 30 years.

Civil Defence

Mr. Jessel: asked the Secretary of State for the Home Department if he will consider endowing a chair for civil defence in a British university.

Mr. Shaw: We have no plans to do so.

Mr. Jessel: Civil defence could save many lives. Should we not study the facts with great care to show up the sheer irresponsibility of the variable response to which my hon. Friend referred a quarter of an hour ago?

Mr. Shaw: I accept my hon. Friend's point. It is a serious subject worthy of proper research. We have allocated about £1 million out of the civil defence budget for research projects into civil defence, which will achieve, I trust, the objectives that my hon. Friend seeks.

Mr. Haynes: I do not agree with the question, but I agree with the answer. Will the Minister have a word with his right hon. Friend the Home Secretary to consider at the next Cabinet meeting the creation of a chair in unemployment in the universities of Britain for unemployment and appoint a professor or the noble Lord Young to sit in it?

Mr. Shaw: I am grateful to the hon. Gentleman for his sterling contribution. It is not a chair that we need, but more job opportunities.

Thames Valley Police

Mr. Andrew MacKay: asked the Secretary of State for the Home Department what criteria he will use in considering the possibility of approving a further increase in the authorised establishment of the Thames Valley police.

Mr. Shaw: My right hon. Friend the Home Secretary will consider that matter in the autumn on the basis of the demonstrated needs of the Thames Valley police and other forces at that time and in the light of further advice from Her Majesty's inspectors of constabulary.
Before the recent increase of 50 posts, 320 additional posts had already been approved for Thames Valley since May 1979, which was more than for any other provincial force.

Mr. MacKay: Is my hon. Friend aware that there are high hopes that extra provision will be made available by my right hon. Friend the Home Secretary in the autumn? The principal criterion that should be considered is that despite the extra 50 police officers that have ben allocated this year, Thames Valley has the worst ratio of police to population of any force in the country. Our county councils are happy to fund their part of the extra cost.

Mr. Shaw: I am grateful for my hon. Friend's remarks. He is right in saying that the Thames Valley police force has a low police-to-population ratio. There are other significant factors that we must take into account,


including the effectiveness and efficiency of the force and progress on civilianisation and crime statistics. I assure him that a thorough review will be undertaken.

Mr. Soley: Does the Minister accept that having more police officers does not necessary lead to more police officers on the beat? As the public rightly want community policing, will he take up the Labour party's suggestion to enter into negotiations with the Police Federation to make a community police officer's job part of a career structure, which is suitably remunerated?

Mr. Shaw: I do not think that on reflection the hon. Gentleman will expect me to welcome that suggestion. However, he will expect me to welcome the fact that the police service has shown itself to be capable of tackling the task with which it is faced. We expect the development of community officers and beat officers to be an important part of that progress.

Mr. Watts: Is my hon. Friend aware that the Thames Valley police force is anxious to develop community policing? If our application for an additional 200 officers had been approved, that is how the resources would have been used. When the force needs 753 additional officers to bring it up to the average complement of forces outside London, an allocation of 50 out of an application for 200 is very meagre and disappointing.

Mr. Shaw: I recognise my hon. Friend's disappointment, but he must understand that my right hon. Friend must assess all needs and all priorities in the review of provincial forces. That is what we propose to do.

Metropolitan Police

Mr. Evennett: asked the Secretary of State for the Home Department if he will make a statement on current manning levels within the Metropolitan police.

Mr. Hurd: The strength of the Metropolitan police at the end of January was 26,870, the highest ever. The strength of the civil staff was 13,168. Total strength, including both police and civil staff, was 6,031 higher than in May 1979. Recruitment is going well, and the Commissioner plans to reach the present establishment of 27,165 by next June.
An increase of 43 in the civil staff ceiling from 1 April has already been approved, and I have also given my agreement in principle to an increase of 50 in the police establishment from the same date to strengthen the Commissioner's efforts against drug trafficking. Last October I set in hand urgent work to consider where there were specific needs for further increases in the three establishment. I am now considering the outcome of this review.

Mr. Evennett: I am grateful to my right hon. Friend for his answer. I think that all Conservative Members are grateful to the Government for their efforts to improve police morale and manpower. However, is he aware that in my district, which covers Bexley, there appears to be undermanning and that in parts of Erith, Belvedere and Thamesmead this is hindering the fight against crime because we do not appear to have enough manpower?

Mr. Hurd: I understand that point, but I am a little puzzled by my hon. Friend's question, because my information is that there has been an increase of about 10 in the strength of the Bexley Heath division over last year's

figure. I shall look further into that point with the Commissioner. However, after a pause, the size of the Metropolitan police is set to rise further.

Mr. Chris Smith: What guarantee is there that the additional police resources that are being made available to the Metropolian police will result in more police officers on the beat in local neighbourhoods, with less extended beats to patrol, instead of racing around in Transit vans, with the constant possibility that there might conceivably be a repetition of the tragic incidents at Holloway in August 1982?

Mr. Hurd: It is for the Commissioner to decide how to use the resources that are available to him. He has to strike a balance between the men on the beat and being able to make men available at short notice when there is trouble. The tendency is towards men on the beat. The House may know that the reorganisation that the Commissioner has set in hand will release for operational duty about 200 police officers over and above the figures that I gave in the main answer.

Mr. Squire: Does my right hon. Friend accept that the Commissioner of Police, who is much respected, has specifically asked for an increase in establishment? Will he undertake to give the very strongest consideration to meeting that request? Many parts of the Metropolitan police area, including mine in east London, would appreciate an increase in establishment.

Mr. Hurd: I am sure that that is so. That is why, since last October, we have been conducting a review, which is now coming to an end. I have received the results, but I have not yet had time to study them. It will not be long, however, before we can reach a decision.

Mr. Woodall: Is the Home Secretary aware that his reply may be good news for London, but that it is not such good news for other metropolitan police forces? Is he aware that the budget of the new police committee that is to take over the West Yorkshire metropolitan police at the end of next month is already £6 million short for the current year? Will the Home Secretary and the Secretary of State for the Environment get their act together, because there has been an increase in crime in Yorkshire as well as in London? The new police committee will find itself in extreme difficulty in keeping present manpower levels, never mind increasing them. What will the Home Secretary do about it?

Mr. Hurd: It is precisely because the new joint boards, including West Yorkshire, came to see me and pointed out the difficulty which the hon. Member has raised that I was able to persuade my colleagues and to announce last week an increase of 51 per cent., from 50 per cent., in the proportion of the police grant borne by the taxpayer. That will be a substantial help to West Yorkshire and the other metropolitan areas in keeping their police forces up to establishment.

Mr. Stanbrook: Will my right hon. Friend bear in mind that the gentle rise in the establishment of the Metropolitan police over the last 30 or 40 years is inadequate to cope with all the extra demands made upon the police and that, despite the increase in the number of civilian staff, we still have far too few people to provide adequate policing on the beat?

Mr. Hurd: It is certainly true that the demands on the police have risen and that the conditions of service have


changed. The cost of a trained police officer, which is about £28,000 a year, has also risen. That is why I am considering again in the review that is coming to an end the right level for the Metropolitan police.

Mr. Kaufman: On the question put by my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), does the Home Secretary agree that there is a grave danger that unless the men responsible for the wanton crime against my hon. Friend's constituents are discovered and dealt with, there will be increasing public anxiety and the good name of the Metropolitan police will be sullied? What will the Home Secretary do to make it clear that men who shield criminals within the Metropolitan police collude in the crime? Will he establish whether it is appropriate for such men to remain members of the force unless they assist to discover the people who committed the crime?

Mr. Hurd: I agree with the right hon. Gentleman and with the hon. Member for Islington, South and Finsbury (Mr. Smith) that that affair is deeply damaging to the Metropolitan police and will continue to be so unless and until it is cleared up. In other cases, the right hon. Gentleman would have been very quick to point out to me that what is at stake is evidence and that the burden of proof has to be proof beyond reasonable doubt, whether one is talking about disciplinary action, as I think he was just now, or about a criminal charge. The burden of proof is the same, because the rights of police officers in that respect are exactly the same — no less, no more — as those of any other citizen. That is the problem. As the right hon. Gentleman will know, the Metropolitan Commissioner has made it clear that if fresh evidence comes to light on the incident that evidence will fall to be investigated.

Drink-drive Defendants (Detention)

Mr. Peter Bruinvels: asked the Secretary of State for the Home Department whether he has any plans to seek to restrict the power of magistrates to order the detention of drink-drive defendants in police cells for up to five days; and if he will make a statement.

The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): We have been considering the possibility of repealing the power in the Magistrates' Courts Act 1980 under which detention in police cells may be ordered for up to four days, and will announce our conclusion before long.

Mr. Bruinvels: Is my hon. Friend aware that there is a lot of concern following newspaper reports about the failure to continue to give magistrates power immediately to imprison in police cells those convicted of drink-driving offences?
Is he aware that there is anxiety that magistrates will be denied the important deterrent of putting these people immediately in prison for up to five days? As more than 1,000 people lose their lives each year through drink-driving-related offences, will my hon. Friend reconsider the suggestion, because we must deter people from drinking and driving?

Mr. Mellor: Of course we must deter people from drinking and driving. The penalty for driving while over the limit is six months' imprisonment. That is not the issue

at stake here. The issue is whether policemen who are there to investigate offences should be used as gaolers when we have a prison system to carry out that function.

Mr. Meadowcroft: Will the Minister consider reducing the blood-alcohol level at which drivers are banned?

Mr. Mellor: My right hon. Friend the Secretary of State for Transport is reviewing road traffic law, and no doubt he will consider that matter.

Mr. Bill Walker: Will my hon. Friend bear in mind, when considering this serious matter, that any action taken by the Government must not be construed as going soft on the drinking driver, since that is one of the most dangerous and irresponsible things that an individual can do?

Mr. Mellor: There is no question of going soft on drinking and driving. We made it plain in a carefully thought-out advertising campaign how anti-social and dangerous it is to drive while under the influence of alcohol, and we made it clear that powers are available to the courts to deal with the offence. As I said to my hon. Friend the Member for Leicester, East (Mr. Bruinvels), the issue is whether it should be appropriate for the courts to sentence people to remain in police cells rather than to imprisonment. That is a different matter from that which has been raised in supplementary questions.

Neighbourhood Watch Schemes

Mr. Madel: asked the Secretary of State for the Home Department how many neighbourhood watch schemes were in operation on the latest convenient date; how this compares with 12 months earlier; and what is the breakdown between the Metropolitan police area and provincial forces.

Mr. Giles Shaw: In January 1986, 9,257 neighbourhood watch schemes were operating in England and Wales, more than double the number in existence a year earlier. The number of schemes operating in the Metropolitan police district is now 3,770.

Mr. Madel: If this welcome new development continues, is my hon. Friend confident that the number of burglaries will decrease considerably?

Mr. Shaw: We have evidence that, as a result of neighbourhood watch and other schemes, there has been a decline in the number of burglaries. The national trend for the first few months of 1985 was down. However, it is essential to maintain a range of activities if we are to reduce the scale of crime.

Mr. Skinner: Has the Minister received any applications for a neighbourhood watch scheme to be initiated in the City of London, where, apparently, the Government give a nod and a wink to swindling on a great scale? Could we have a neighbourhood watch scheme in Whitehall, which could watch the Government doctoring minutes and the Department fiddling unemployment figures? A man on the bus this morning said to me, "Marcos in the Phillipines has nothing on the Government when it comes to fiddling figures."

Mr. Shaw: It is good to have the fiddler back on the roof again. If there is a requirement to set up a neighbourhood watch scheme in the City of London, for the benefit of the residents, to deal with opportunist crime, we shall be pleased to consider it.

Mr. Stern: Does my hon. Friend agree that the figures he has announced will be welcomed by all those who are seriously interested in reducing crime? As a number of schemes have been in operation for comparatively lengthy periods in many areas, including my constituency, will he consider whether it would be appropriate to arrange a national conference of representatives of some of the schemes so that experiences can be compared?

Mr. Shaw: I remind my hon. Friend that there was a national conference on crime prevention not long ago. I shall consider what he has suggested in relation to the standing conference on crime prevention, which will meet later this year.

Mr. Evans: Is planning permission required for the erection of crime watch notices on lamp posts and walls?

Mr. Shaw: I understand that advertisement regulations require planning permission for the erection of such notices. I trust that all local authorities will give it.

Mr. Gerald Howarth: Welcome though the neighbourhood watch scheme is, is my hon. Friend aware that the number of burglaries increased from 643,000 in 1980 to 897,000 in 1984? Does he accept that it is about time we took some tougher measures of the sort that the public cannot expect the Opposition parties to introduce? Instead, the public look to the Conservative party to bring forward such measures. Does my hon. Friend agree that they should include corporal punishment and the withdrawal of driving licences, and even of social security benefit?

Mr. Shaw: I remind my hon. Friend that there was a decline in the number of burglaries in the first nine months of 1985. I think that my hon. Friend quoted the recorded crime figure, which is a different matter. I agree with him that the Government have shown the way in which to deal with crime by introducing a range of effective deterrents that are designed to combat crime and criminal activity generally.

Crime Survey

Mr. Cohen: asked the Secretary of State for the Home Department whether his Department is currently undertaking any studies into the effects of the fear of crime.

Mr. Mellor: The British crime survey, conducted by the research and planning unit, collected a great deal of information on fear of crime and its effects. Findings on fear have been published in three reports in the Home Office research series, and two further studies are in progress.

Mr. Cohen: The Minister has referred already to the recent public relations seminar, in which the Prime Minister talked about crime prevention. How much money will the Government provide for crime prevention, especially to local authorities, which want to get on with the job of tackling the vandalised and run-down areas where crime breeds?

Mr. Mellor: The hon. Gentleman has a long and somewhat selective memory. He might care to reflect on the dramatically increased resources given to the police, which mean that they are back on the beat and organising neighbourhood watch schemes, whereas under Labour Governments they were compelled to drive around in panda cars because there were not enough of them.

Nuclear Attack (Casualty Figures)

Mr. Strang: asked the Secretary of State for the Home Department what recent discussions the Government have had with the British Medical Association on the assumptions for any estimate of casualties in the event of nuclear attack; and if he will make a statement.

Mr. Giles Shaw: None, Sir.

Mr. Strang: Does the Minister recall the dispute some years ago between the Government and the British Medical Association following the publication of the report on the effects of nuclear war? Do the Government agree with the BMA, or have they abandoned any attempt to estimate the length of survival, given certain assumptions in a nuclear war?

Mr. Shaw: The hon. Member will recall that the Government do not make detailed estimates of casualties, which would depend on the strategic intention of the enemy and other factors that cannot be predicted.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Fisher: asked the Prime Minister if she will list her official engagements for Thursday 20 February.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House I shall be having further meetings later today. This evening I shall attend a reception to mark the 75th anniversary of the Royal National Institute for the Deaf.

Mr. Fisher: When did the Prime Minister first know of the deadline of 4 March?

The Prime Minister: I have nothing to add to what I have already said on this matter.

Mr. Hanley: Is my right hon. Friend aware that British companies made acquisitions to the tune of some £4 billion in the United States last year, and therefore acquisitions in the United Kingdom by United States companies is by no means a one-way street?

The Prime Minister: Yes, I saw a detailed account in a paper today of inward and outward investment, and of American investment in this country. The figures published in the Financial Times show that British companies acquired 160 businesses in the United States last year and 142 in 1984. I hope that the British acquisition of businesses in the United States was welcomed in that country.

Mr. Kinnock: What specific assurances are being sought from potential purchasers of the constituent parts of British Leyland? What means will the right hon. Lady adopt to ensure that such assurances are enforced in practice?

The Prime Minister: My right hon. Friend the Secretary of State for Trade and Industry spoke about some of the assurances that were being sought, in his statement yesterday. The assurances are, for example, that the British nature of Land Rover and Range Rover in particular should be honoured, and that there should be certain assurances on sourcing.

Mr. Kinnock: How can the Prime Minister convince herself that honour is equivalent to binding assurances that will determine the future of an essential part of the British motor industry? What did the Under-Secretary of State for Trade and Industry mean in the other place yesterday when he said about such assurances:
with regard to British content, trade marks, names and the like … there is a time limitation".—[Official Report, House of Lords; 19 February 1986, Volume 471, c. 634.]

The Prime Minister: We believe that we are seeking the best future for Land Rover, Freight Rover and the whole of British Leyland. We are seeking the best future for jobs through the extension of trade and business. My noble Friend was clear in what he said to the other place, and I do not understand why the right hon. Gentleman finds difficulty with it.

Mr. Kinnock: Does the best future, as defined by the right hon. Lady, include binding enforceable assurances?

The Prime Minister: The right hon. Gentleman must see how long enforceable assurances can be instituted. He must then get legal advice upon that. That is precisely what my noble Friend was saying. I make it clear that there is no binding enforceable assurance about the future of a loss-making British Leyland.

Mr. Richard Page: As it was known by Members of this House and by the trade unions that discussions between General Motors and British Leyland were taking place months before Christmas, would my right hon. Friend like to comment on the fact that either the Opposition are ill-informed, or they have waited for the right moment to make political capital and are not worried about the workers in British Leyland?

The Prime Minister: We are anxious to secure a good future for British Leyland. Taxpayers have already put into British Leyland some £2·2 billion and have guaranteed a further £1·6 billion. That means that every family in the United Kingdom has contributed £200 to British Leyland. That situation cannot continue.

Mr. J. Enoch Powell: Does the Prime Minister realise that hundreds of thousands of her fellow citizens whom she regards as no less British than her own constituents in London are looking to her to defend with courage and visibility their rights and their status?

The Prime Minister: The right hon. Gentleman is aware that I am to see leaders of the Unionist parties next week, and the SDLP after that. I hope and believe that people who are completely Unionist in Northern Ireland will accept the decisions of this House.

Mr. Hickmet: Will my right hon. Friend comment upon Anglo-Turkish relations following the visit of the Turkish Prime Minister? Does she agree that Turkey is progressing satisfactorily towards a restoration of full political and human rights? Does she further agree that Turkey is committed to a just and fair solution for both communities in Cyprus?

The Prime Minister: We had very good talks with the Turkish Prime Minister. He is taking enormous strides towards inproving human rights in Turkey. We discussed briefly the situation in Cyprus and we both hope that both parts of Cyprus, which is a present artificially partitioned—I hope not permanently — will co-operate with Mr. Perez de Cuellar in seeking a satisfactory future for Cyprus as a unitary, although federal, state.

Dr. Owen: Will the Prime Minister now take action about the distressing case of the teachers' dispute? Will she accept that, although the Education Bill published today contains many worthwhile things, the Government nevertheless expected to build on the ACAS proposal in England and Wales and produce a quantified offer for Scotland?

The Prime Minister: As the right hon. Gentleman is aware, processes under ACAS are continuing with the unions which are party to that agreement. A decision about the attitude of the NUT will have to be taken by the NUT. We will know more in a few days' time. I hope that the right hon. Gentleman will welome the Education Bill and the increased powers that it gives to parents in school governorship.

Mr. Gale: After reflecting on the talks that she had with the Turkish Prime Minister, can my right hon. Friend tell us when the property stolen by the Turkish army of occupation in northern Cyprus will be returned to my constituents who own it?

The Prime Minister: I am not able to give my hon. Friend the information that he seeks. We shall, of course, take up any specific case.

Mr. Meadowcroft: asked the Prime Minister if she will list her official engagements for Thursday 20 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Meadowcroft: Many of us who have expressed anxiety about increasing American involvement in British industry are not motivated by anti-American sentiment. We are simply deeply worried about what is happening to British Leyland, to Westland and to large parts of our computer industry. What is happening will inexorably ensure that crucial decisions about the character and development of British industry are be made in the United States. Will the Prime Minister sit back and let that happen?

The Prime Minister: Britain invests abroad and British companies go abroad on a very considerable scale. When they invest in the United States—ICI has made a considerable investment in Beatrice Chemicals, amounting to about £700 million — I believe that they are welcome and that there is no anti-British feeling there. I fear that some anti-American feeling has been aroused. I fear that some has been aroused deliberately about the future of British Leyland. All bids are being considered, but we are concerned about the future of the whole of British Leyland and trying to get it privatised.

Mr. Hannam: asked the Prime Minister if she will list her official engagements for Thursday 20 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Hannam: Has my right hon. Friend taken notice of the Vickers employee consortium proposals for the buy-out of the shipyards at Barrow and Birkenhead? Is she further aware of the local communities' involvement in the proposals? In view of the success of the National Freight Corporation workers' buy-out, will my right hon. Friend confirm that it is still the Government's policy to encourage the wider ownership of British industry?

The Prime Minister: The answer is yes—to further privatisation and to the encouragement of wider ownership. We shall, of course, consider that bid along with all of the others for that shipyard.

Mr. MacKenzie: Is the Prime Minister aware that we have just heard the figures that she gave for taxpayers' assistance to British Leyland? Is she aware that some of us cannot for the life of us understand why the Swedes, the Japanese, the Germans, the Italians and the French — indeed all our competitors — give much more assistance to their motor car industries than we do to ours? We cannot understand why Britain will not help its motor car industry as do our competitors.

The Prime Minister: I do not believe that other countries are giving more assistance than has been given to British Leyland. I stress once again that taxpayers' grants and guarantees amount to every family giving £200 in assistance to British Leyland and, alas, British Leyland is still in a loss-making condition.

Mr. Nicholas Winterton: asked the Prime Minister if she will list her official engagements for Thursday 20 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Winterton: Will my right hon. Friend assure those of us who openly and honourably disagree from time to time with Government policy, but do not question her courageous leadership or her determination to restore the economic and political power of the United Kingdom, that she will continue to respond robustly to the hypocritical, irresponsible, carping cant of the Opposition parties and lead the Conservatives into a third successful general election?

The Prime Minister: Yes, on the same excellent policies that secured the first two victories.

Mr. Skinner: Now that the Prime Minister, as she showed in a recent broadcast, has become deeply concerned about the low-paid and levels of taxation, will she take the necessary steps to abolish the poll tax? [Interruption.]

Mr. Speaker: Order. This is the first opportunity that the hon. Gentleman has had to ask a question of the Prime Minister today.

Mr. Skinner: Is she aware that the poll tax means that the poor will pay for the rich? Is she further aware that a wealthy couple can buy a £500,000 house in Dulwich and be relieved of paying £3,000 in rates in exchange for a few hundred pounds in poll tax, and that pensioners will have to pick up the bill? Why does she not put her money where her mouth is?

The Prime Minister: There is not a poll tax. What we have proposed is a community charge, which would be rebated. I note that the hon. Gentleman supports a system under which many people pay nothing to local rates but put

up public expenditure. We would not approve such a system. I note that the hon. Gentleman wants a system which would go in for a rating revaluation, and all the injustice that that would mean.

Mr. Temple-Morris: asked the Prime Minister if she will list her official engagements for Thursday 20 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Temple-Morris: Is my right hon. Friend not seriously concerned at the escalation of fighting in the Persian Gulf and, not least, the reported shooting down of an Iranian civil airliner by Iraqi jets this morning? In connection with all this, will my right hon. Friend confirm that we are not supplying arms or military equipment to Iran, or, for that matter, to Iraq? Will she do her utmost, in conjunction with our allies, to limit, if not finish, this fighting and this unfortunate war?

The Prime Minister: I am aware of that tragic incident this morning, but I have nothing further to report about it. We do not know anything more about the passengers who were on board. We do everything possible in connection with any reconciliation or any mediation in the Iran-Iraq war. There is no shortage of efforts. Unfortunately, we have not been able to find a solution. We do not supply equipment which would exacerbate the conflict, and we will do everything possible to try to bring it to an end.

Mr. Merlyn Rees: Given the reaction to the so-called Anglo-Irish agreement in the Province, the boycotting and non-co-operation that is taking place in the Province, the reports last night of disaffection in the RUC, the newspaper reports — but newspaper reports only — of calls from an elected representative to take over the Parliament building at Stormont, leading to UDI, and the report of an Ulster workers' strike on 3 March, should not the Government make a statement on this? The discussion is takng place elswhere but not here, and we have not even had a report on the Prime Minister's meeting with the Taoiseach yesterday. There are five private notice questions in the Dail. It matters to us here as well as to the people in the south of Ireland.

The Prime Minister: The Taoiseach and I discussed the Anglo, or United Kingdom-Irish agreement yesterday. We pointed out that we both believed that it must be implemented. We shall do all in our power to implement it. We shall do everything that we can to reassure Unionist opinion and to have structures for consultation with them. We hope that the SDLP will soon honour its commitment to enter into talks about devolution, which, of course, would put much more power into a devolved Assembly, and much less to the Intergovernmental Conference. We also hope for increased security co-operation across the border. We welcome very much the decision of the Taoiseach to sign the European convention on the suppression of terrorism.

Business of the House

Mr. Neil Kinnock: May I ask the Leader of the House whether he will state the business for next week?

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:
MONDAY 24 FEBRUARY—There will be a debate on the second report of the Select Committee on Social Services in Session 1983–84 on children in care (House of Commons Paper 360) and the Government's response (Cmnd. 9298). The debate will arise on a motion for the Adjournment of the House.
Motions on the Bishops' (Retirement) Measure and the Ecclesiastical Fees Measure.
Proceedings on the Agricultural Holdings Bill [Lords], which is a consolidation Measure.
The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
TUESDAY 25 FEBRUARY — Motion on the Local Government Rate Limitation (Prescribed Maximum) (Rates) Order.
Motion relating to the Local Government Reorganisation (Designated Councils) (Pensions) Order.
WEDNESDAY 26 FEBRUARY—There will be a debate on the Royal Air Force on a motion for the Adjournment of the House.
Motion on the Education and Libraries (Northern Ireland) Order.
THURSDAY 27 FEBRUARY—Until about seven o'clock there will be a debate on motions relating to recommendations in the second, third and fourth reports of the Select Committee on Procedure of Session 1984–85 (House of Commons Papers Nos. 49, 396 and 623) and the first report of the Select Committee on Procedure of this Session (House of Commons Paper No. 42).
Remaining stages of the Housing (Scotland) Bill.
FRIDAY 28 FEBRUARY—Private Members' Motions.
MONDAY 3 MARCH—Opposition Day (9th allotted day). There will be a debate on an Opposition motion, the subject for debate to be announced.
It is expected that the Chairman of Ways and Means will name opposed private business for consideration at seven o'clock.

Mr. Kinnock: I am grateful to the right hon. Gentleman. On British Leyland, is the right hon. Gentleman aware that, on Tuesday night, the Minister of State, Department of Trade and Industry said:
the House was sovereign; the House has total and complete control over what happens"?—[Official Report, 18 February 1986; Vol. 92, col. 291.]
However, yesterday afternoon, in the other place, the Under-Secretary of State for Trade and Industry said that the decision relating to BL would merely be "reported to Parliament". Will the right hon. Gentleman give a clear guarantee that the House will have an opportunity to debate the whole issue before any deal is struck?
Yesterday, the Paymaster General was caught out trying to slip a policy change through by the back door by means of a written answer. Later today, he will have to make a statement about fiddling the unemployment figures. When will the right hon. Gentleman allocate

Government time for a full-scale debate on unemployment, including the proposals recently put forward by the Select Committee on Employment, which has a special regard for the problems of the long-term unemployed?
Will the right hon. Gentleman ensure that there will be a debate on Welsh affairs as soon as possible?

Mr. Biffen: In the debate on 18 February, my hon. Friend the Minister of State, referring to parliamentary consideration of any deal that might be concluded concerning British Leyland, said:
When a conclusion to negotiations is reached my right hon. Friend will immediately make a statement to the House and he will accept that it will be for the House to debate and decide upon the result of those negotiations." — [Official Report, 18 February 1986; Vol. 92, column 291.]
I am happy to endorse my hon. Friend's remarks.
As to the preparation of statistically more accurate unemployment figures, I am sorry that the rather emotive language which the Leader of the Opposition has a disposition to use has crept into his remarks this afternoon. I assure him that we attach great importance to this topic. The matter of a debate will be considered through the usual channels. Obviously, it would be appropriate for a Government response to the findings of the Select Committee on Employment to be tabled.
Finally, in the calmer waters of Welsh business, we very much look forward to an early debate on Welsh affairs.

Mr. Richard Alexander: My right hon. Friend will be aware that clause 2 of the Shops Bill was considerably amended in another place. In view of the widespread interest in the outcome and contents of the Bill, will my right hon. Friend arrange for a Government statement to be made early next week on whether that amendment will be accepted?

Mr. Bitten: Of course, I shall refer that request to my right hon. Friend the Home Secretary. I am sure that my hon. Friend will be interested to know that, in the reasonably near future, the House will have the opportunity to consider the Second Reading of that legislation.

Mr. David Alton: Will Conservative Members be given the opportunity of a free vote on the Shops Bill on Second Reading? Next week, when the report of the Select Committee on Procedure is discussed, will the timetabling of Government Bills be a matter for a free vote as well?

Mr. Biffen: Ever ambitious as I am to take responsibility in all these matters, I must say that this matter is for my right hon. Friend the Patronage Secretary.

Mr. John Browne: Does my right hon. Friend accept that, just as in 1979, when a rapid rise in oil prices led to a speculative build-up of reserves which worsened the impending glut in the oil market, so now, would not a rapid fall in oil prices, resulting in the ceasing of exploration, cause great damage in future years? As Great Britain has an influence on the oil market far out of proportion to its oil production, could we not play a critical role in ensuring that the market does not get out of control? Should we not debate this vital issue?

Mr. Biffen: I am sure that my hon. Friend will understand that this is not the appropriate forum for me to engage in economic examination. However, I assure him


that we are now within a month of the Budget debate and I am sure that his topic will have much relevance to the discussions that take place then.

Mr. Geoffrey Lofthouse: Is the Leader of the House aware that a serious situation is developing in the West Yorkshire police authority, which has a new joint board? That authority is committed by the Home Office to provide a force which will cost £63 million, but the Department of the Environment guideline states that it can spend only £52 million. That means that the authority will have to introduce new labour-saving incentives not to pre-empt the precept which will take it into penalties under the DoE guidelines. Failing that, the authority will have to reduce the force next year by 1,300 men. Will the Leader of the House arrange for a statement to be made to the House?

Mr. Biffen: The hon. Gentleman will understand that I am in no position to comment on the situation that he has outlined. I will of course refer his point to my hon. Friends who have interests in these matters.

Mr. John Butterfill: May I draw my right hon. Friend's attention to early-day motion 57 standing in my name? The motion calls for the introduction of a blindness allowance, and has been signed by nearly 270 hon. Members of all parties. Another 20 hon. Members have signed the amendment, making a total of nearly 300 Members.
[That this House, whilst appreciating all that has been done for the blind by this and previous governments, wishes to remind the Government of the acceptance by successive Ministers of the case for a blindness allowance and, in particular, the statement by the then Minister of State for Social Security and the Disabled (the Right honourable Member for Daventry) on 24th July 1979 that the case for an income in the form of a blindness allowance is unanswerable on its merits; points out to the Government that the blind do not normally qualify for mobility, invalidity, attendance or other allowances, unless suffering from a second disability; and calls upon the Government to take immediate action to replace the existing range of benefits available to the blind with a means-tested blindness allowance.]
Given that Ministers and Front Bench spokesmen do not usually sign early-day motions, that means that more than 50 per cent. of hon. Members eligible to vote signed the motion. That reveals a great deal of interest. Will my right hon. Friend therefore find an early day for a debate on that subject?

Mr. Biffen: I should like to congratulate my hon. Friend on engaging in a well-organised and successful pre-Budget initiative. The most appropriate time for debate will be when the Budget is presented.

Mr. Tom Cox: Will next Thursday's debate on procedure allow discussion on what has now sadly become the Friday fiasco, in which private Members' Bills, before they are discussed, are objected to? If that is not possible next Thursday, will the right hon. Gentleman look closely into the matter?

Mr. Biffen: The topics to be discussed are those contained in the Procedure Committee reports and recommendations to which I have referred. The Procedure Committee has not recently attended to the subject to which the hon. Gentleman referred.

Mr. John Stokes: In view of the number of members of Her Majesty's Government who are still publicly advising my right hon. Friend the Prime Minister on how best to win the general election, will my right hon. Friend arrange, in his capacity as the Leader of the House, for those people to be given leave of absence to take the waters at Aix-les-Bains, Bath or some other suitable English spa, so that the rest of the Government can get on with governing the country?

Mr. Biffen: I think my hon. Friend owes it to the House to tell us how many he thinks will be left behind.

Mr. John Maxton: Has the Leader of the House heard the strong speculation that the Minister of Agriculture, Fisheries and Food is announcing today plans to sell the whole of the Forestry Commission's 3 million acres? If that is the case, will he ensure that that announcement is made in the House—not at a press conference—later this afternoon if necessary?

Mr. Biffen: I take note of what the hon. Gentleman has said. I confess that I have not heard any such report, but I will certainly investigate the matter.

Mr. Alexander Pollock: May I echo the point made by the hon. Member for Glasgow, Cathcart (Mr. Maxton) and stress to my right hon. Friend that there would be considerable disquiet on the Conservative Benches if there were to be privatisation of the Forestry Commission?

Mr. Biffen: I can well understand that, and that is why I answered the hon. Member for Glasgow, Cathcart (Mr. Maxton) in the rather measured way that I did.

Mr. D. E. Thomas: Does the Leader of the House accept that the waters of Welsh politics are not as calm as he suggested earlier? As the usual channels have so far failed to agree on which day, in the view of the House, is St. David's day, will the Leader of the House give us an assurance that there will be an early debate under the stewardship of his right hon. Friend the Secretary of State for Wales, who has again this week managed to generate a crisis between himself and the Welsh local authorities which might lead to the Secretary of State's induced resignation?

Mr. Biffen: Among all the many hon. Members who look forward to an early debate upon the principality, I am sure that my right hon. Friend the Secretary of State for Wales looks forward with the greatest anticipation.

Mr. Robert Adley: Is my right hon. Friend aware that anxiety about the statement on the Forestry Commission by my right hon. Friend the Minister of Agriculture, Fisheries and Food is not restricted to Scottish Members? It seems that there is no information in the building about that statement. Is my right hon. Friend aware that 750 acres of prime land in my constituency have been the subject of private negotiations between the Forestry Commission and a somewhat disreputable firm of London developers? That is causing great anxiety to the local authorities in my constituency, but I have been able to find out little about the matter. Does he agree that there is a need for an early debate in the House about the Government's intentions and the implications of the matter?

Mr. Biffen: If the position is as the hon. Member for Cathcart tentatively outlined, I would say at once that that


was a matter which would require the attention of the House, but, as I said to the hon. Gentleman, I should like to look into the matter, and that I certainly shall do.

Mr. Greville Janner: When can we have a debate on road safety? Is the Minister aware of the anxiety felt in Leicestershire over the Government's refusal to take any action over the continuing series of deaths and tragedies on the Groby road? It is not good enough merely to say that it is a matter for the county council, especially as the county council happens to be Tory-dominated and does as little as possible to help the people?

Mr. Biffen: The topic is undoubtedly important. It has that range of interest which would commend itself to Question Time on Monday rather than to a debate.

Mr. Simon Hughes: Will the Leader of the House undertake to ensure that there will be a debate within a week or so at most—in any case before Easter—after the publication of the report on nuclear waste by the Select Committee on the Environment, which we know is expected in the first half of next month? It should be on the whole subject contained in that report. It is important, given the anxiety expressed in the House yesterday and today in the European Parliament, which looks forward to seeing the report and its recommendations.

Mr. Biffen: That is undoubtedly a most important report. The first link in the sequence of events must be the Government's consideration of and formal observations upon the report. We can perhaps consider the matter after we have got that far.

Mr. David Crouch: May I suggest that my right hon. Friend does not proceed too quickly to introduce the Shops Bill in the House, so as to give the Government enough time to consult colleagues on both sides of the House as to how the Bill can be properly amended before it is considered here?

Mr. Biffen: I shall pass on those worldly wise and good-natured observations to my right hon. Friend the Secretary of State for the Home Department. The Patronage Secretary will have heard them, as he sits here.

Mr. Michael Foot: In view of the rumours about the sale of the Forestry Commission and in view of the fact that the right hon. Gentleman does not seem to know what is going on, will he at least guarantee—this falls directly within his power—that there will be a debate on the matter in the House before the Government take any such action?

Mr. Biffen: It is not that I do not seem; it is that I do not know. I have said that I will look into the matter. My first obligation is to look into the matter and establish the facts and consider the appropriate action thereafter.

Mr. Harry Greenway: Has my right hon. Friend seen press reports today which way that 200,000 London households will have rate reductions following the abolition of the GLC? Does that not underline the urgent need for my right hon. Friend the Secretary of State for the Environment to come to the House and announce his intention to get rid of the wrecking amendment to the Local Government Bill which

was passed in the other place? It would permit the continuation of activities similar to those of the GLC which has given £5,000 to Ealing CND to conduct a completely spurious campaign to make Ealing a nuclear-free zone from 1 April? The Bill is needed to deal with actions similar to those of Labour councillors in Ealing who attempted to give £2,000 of public money to Militant councillors in Liverpool and Hackney. Happily, they were defeated.

Mr. Biffen: I am delighted to endorse my hon. Friend's satisfaction at some of the consequences of the abolition of the GLC. On the matter of amendments to the local government legislation that have been passed in another place, I think that we shall have to pause for reflection. At the moment I cannot advise my hon. Friend on what is likely to be the Government's reaction.

Mr. Tom Clarke: Now that the United States Senate has had a debate on the Philippines elections and has declared them as fraudulent, is it not right that the House, which has approved overseas aid to the Marcos regime and which is committed to human rights, should have a debate on that important matter?

Mr. Biffen: I am sure that the hon. Gentleman, who is very agile in these matters, will use such opportunities as will be presented by overseas aid Questions on Monday. I shall certainly mention the wider issue of a debate to my right hon. and learned Friend the Foreign and Commonwealth Secretary.

Mr. Tony Marlow: In the light of today's impudent debate on the subject of Sellafield, will my right hon. Friend tell the impotent but power-hungry poseurs of the European Assembly to keep their foreign noses out of our business and to jump in the Rhine or whatever deep and fast-flowing stretch of European water they find most appropriate? If that is too raucous for my right hon. Friend, will he undertake that he will, in no circumstances, bring measures before the House which enhance the powers or prestige of that misbegotten institution?

Mr. Biffen: I do not think that any of that necessarily strictly arises out of next week's business. It seems to me that when my hon. Friend begins to address himself to the matters of the Strasbourg Assembly he begins to pick up the bad habits of Mr. Leslie Huckfield.

Mr. Peter Shore: Further to the rumours of the possible privatisation of the Forestry Commission land, we understand that the Leader of the House has not received any information that such a statement is being made. If a statement is being made and if his inquiries show that a statement has been made outside the House, will he make arrangements for a statement to be made to the House later today? We have all had enough of statements being made outside the House.

Mr. Biffen: As I have said to the hon. Member for Cathcart, I shall look into the matter and consider it in the light of what is revealed.

Mr. John Wilkinson: Following the significant question of my hon. Friend the Member for Canterbury (Mr. Crouch) and in view of the fact that politics is allegedly all about priorities, will my right hon. Friend consider whether the Shops Bill deserves the


priority it has been accorded hitherto? Might it not be for the convenience of the House and the better conduct of its business if it were quietly dropped?

Mr. Biffen: Although I belong to the political school whose motto is "one difficulty at a time", I say to my hon. Friend that this is a Bill which was outlined in the Queen's Speech and which has received very careful consideration in another place. Of course I take account of his views, but I do not hold out a prospect of any intention to drop the legislation.

Several Hon. Members: rose—

Mr. Speaker: Order. I have to take into account the business before the House today. I am reluctant to curtail business questions, but I must limit them to a further 10 minutes.

Mr. Robert Maclennan: Further to the alleged statement of the Minister of Agriculture, Fisheries and Food, and in view of the fact that, if it were true, he would have taken leave of his senses, will the Leader of the House make the opportunity available to the Minister to come to the House and deny that he has proposed to sell 3 million acres, particularly in view of the fact that land prices are already plummeting as a result of the collapse in agricultural incomes and that that would finally remove the bankers' security?

Mr. Biffen: I have tried to answer fairly the question put to me by the hon. Member for Cathcart. I hope that the hon. Gentleman will allow me to leave it at that.

Mr. Ivor Stanbrook: Is my right hon. Friend aware of the widespread opposition in the country to the Shops Bill? Will he not hide behind niceties of procedure but come clean and tell us whether the Government will accept an amendment of substance which will preserve the special character of Sunday?

Mr. Biffen: The handling of the Bill is a matter for my right hon. Friend the Home Secretary, and I shall draw to his attention the anxiety expressed by my hon. Friend.

Mr. Ron Davies: I understand that the Leader of the House is not aware of the announcement about the sale of Forestry Commission lands. Can I assure him that there is what appears to be an authoritative statement on the tapes, referring specifically to the sale of 3 million acres of forestry land, quoting a revenue of £1,500 million which the Treasury expects to receive, and stating specifically that the Government intend that Forestry Commission holdings shall be taken over by City institutions? In view of the performance of the City in financing British industry, does the Leader of the House think that our national heritage, rural employment and the environment are safe in the hands of those people? If the statement is not true, will the Government immediately refute the announcement on the tapes? If it is true, will the Minister ensure that we have either a statement or a debate later today or early next week?

Mr. Biffen: I note what the hon. Gentleman has said. I am sure that he will understand that, having given my reply to the hon. Member for Cathcart, there is not much that I can add.

Sir Paul Hawkins: Will my right hon. Friend pass to our right hon. Friend the Minister of Agriculture, Fisheries and Food my complete

opposition to any sale of forestry land, as my constituency contains probably the largest acreage in England, and is a great environmental and recreational area?

Mr. Biffen: I really do not know what I have done to deserve this. I was not aware of the suggestions that were made by the hon. Member for Cathcart. I told him that I would look into the matter, and that I most certainly shall.

Mr. John Ryman: Is it now possible to get a sensible statement from the Government about the decision by the independent colliery review tribunal, recommending that Bates' colliery should remain open against the vehement opposition of the National Coal Board? The Leader of the House will be well aware from our correspondence and my previous questions that the Secretary of State for Energy simply cannot do anything to influence the NCB, and that the NCB has been prevaricating and messing about for 16 days, and has flatly refused to decide whether to accept or reject the recommendations. That is unfair on 1,400 of my constituents who work in the mine. Will the Leader of the House intervene, and state what the Government's position is?

Mr. Biffen: All I can say is that, if it is a question of ministerial influence, my right hon. Friend the Secretary of State for Energy is certainly in a more appropriate position than any other Minister, and I shall draw his attention to the hon. Gentleman's point.

Mr. Michael Brown: Will there be a statement next week on the disposal of nuclear waste?

Mr. Biffen: I have no observation to make at present.

Mr. Harry Cohen: When can we expect a debate on London Regional Transport? During the hour-and-a-half debate the other week only two London Labour Members could speak, and one of them was limited to two minutes. That is supposed to be the system that replaces full-scale accountability by the Greater London council. Clearly, it is inadequate. When can we have another debate?

Mr. Biffen: As the hon. Gentleman has observed, we have debated the subject recently, and, like many hon. Members, he feels that the debate was not sufficiently wide or long. I shall make that point to my right hon. Friend the Secretary of State for Transport. But, being a realist, I suggest that for the moment he had better take his luck with transport questions on Monday.

Mr. Barry Porter: In view of the increasing probability of violence in the Province of Ulster, will my right hon. Friend make time for an early debate so that at least hon. Members understand what is likely to happen before that probability turns into a virtual certainty?

Mr. Biffen: I note what my hon. Friend says. In the interim, questions to the Secretary of State for Northern Ireland arise on Thursday, and I am sure that all parts of the House will wish hon. Members from the Province to be present and to participate.

Mr. William O'Brien: In view of the reply given to my hon. Friend the Member for Hemsworth (Mr. Woodall) by the Home Secretary about the financing of the west Yorkshire police force, and in view of the reply


given to my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) on the same subject, will the Leader of the House note that this is a serious question because the Home Office is saying that the police force there requires £63 million, and the capping by the Department of the Environment is set at £52 million? That is a vast difference. No policeman can be made redundant. Will the Leader of the House assure us that, if agreement cannot be reached between the two Departments, he will bring the matter before the House so that we can debate and resolve it? It is a serious matter for west Yorkshire, and we should like to see it resolved.

Mr. Biffen: I truly do not doubt that it is a serious matter for west Yorkshire. It is imperative that the problem should be solved. As I said in answer to an earlier question, I shall refer the matter to the attention of my right hon. Friend the Secretary of State for the Environment.

Mr. Peter Bruinvels: Will my right hon. Friend widen the scope of Tuesday's debate on rate limitation, so that the House can be made aware of the problems in Leicester with the city council, which has now levied a new rate of 45·5p in the pound—an 80 per cent. increase for 1986–87 — and which has told the ratepayers "That's it. You can't even go and argue."? Businesses cannot argue, and that will reduce the number of jobs.
Also, during Thursday's debate on procedure, could consideration be given to those unfortunate Conservative Members who are having to suffer Labour Members entering their constituencies and addressing public meetings without having the courtesy to inform them?

Mr. Biffen: Let me at once answer the allegations of infringing one of the well-known restrictive parliamentary practices of preserving one's constituency from the ravages of travelling opponents. None of that arises on the Committee's recommendations on procedure, so my hon. Friend should look to an Adjournment debate to make his point.
As to the former matter, my hon. Friend is now such an acknowledged parliamentarian that he will have no difficulty in making the speech of Leicester as though it belonged to the nation.

Mr. Frank Cook: Will the Leader of the House please recall the statement made by the Secretary of State for the Environment on 9 January 1985 when he promised to announce the sites that would be identified for the possible disposal of nuclear waste? Is he aware that some sources have it that the information on those sites has been on the Secretary of State's desk for the past five months and that for some reason he is unable to

face the House with them? Will he agree to make representations to the Secretary of State to bring the statement forward, so that the anxiety felt in the rest of the country can be modified?

Mr. Biffen: I am sure that the hon. Gentleman will realise that, during business questions, I never make speculative references to statements, but I shall draw the attention of my right hon. Friend the Secretary of State for the Environment to the issue.

Mr. Jerry Wiggin: Is my right hon. Friend aware that there is no case for the British taxpayer to own one square inch of ground on which to grow unprofitable trees? Is he aware that the only thing wrong with the statement of the Minister for Agriculture, Fisheries and Food is that it should have been made several years ago?

Mr. Biffen: I believe that I have gone through enough questions about that elusive topic. I shall just say, "How interesting."

Mr. D. N. Campbell-Savours: May I ask, for the eighth time, for a debate on the report of the Select Committee of Privileges on the confidentiality of Select Committees?
Regarding the statement that is about to be made to the House on the new method of providing unemployment statistics and the fiddling of the figures, can we have a debate on the way those statistics are compiled? This is the only opportunity that we shall have today to ask the Leader of the House that question. Will he give me a direct reply?

Mr. Biffen: On the first question, I believe that the hon. Gentleman would be the first to confess that he is an assiduous attender of these little sessions on Thursday afternoons. I answered his question last week and said that there would be a debate on the Select Committee of Privilege's report.

Mr. Campbell-Savours: When?

Mr. Biffen: The hon. Gentleman's second question could well be considered in the wider context of a debate on employment, but I suggest that we see how matters stand after the statement.

Mr. Speaker: Mr. Kenneth Clarke—statement.

Mr. Robert Adley: On a point of order, Mr. Speaker—

Mr. Speaker: Order. I shall take points of orders after the statement.

Mr. Adley: It is directly related to what we have been discussing.

Mr. Speaker: I shall still take it afterwards.

Unemployment Figures

The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): With permission, Mr. Speaker, I should like to make a statement on changes to unemployment figures.
I announced yesterday that at the request of our Department's statisticians, and in order to ensure greater accuracy, I have agreed that the compilation and publication of the monthly unemployment statistics will take place some two weeks later than at present. This is not a major change in presentation, but the improved estimates will allow a more complete and accurate picture to be given of the latest labour market developments. I have placed further details in the Library.

Mr. John Prescott: While the Opposition welcome the fact that the Government have at last been forced to make a statement about what they are doing, this eight-line statement is an insult to the intelligence of hon. Members. We are forced to read the Library statement to see the real intent and impact of this further fiddling of the unemployment figures. I am forced to ask several questions to establish the true intent of the so-called adjustment, which has more to do with the political intentions of the Department than with the economic statisticians' request.
Does the Paymaster General accept that the change in the presentation of the monthly employment figures means that they are now to include monthly figures for earnings and monthly figures for industrial disputes, which were previously issued on different days, to distract attention away from the single announcement of the unemployment figures? Does the Minister accept that, if he wished to adopt that rationale, he should have included the inflation figures with the earnings and employment figures, or does he want separate treatment of the inflation figures?
Can he confirm that the new method of calculation will reduce unemployment figures in absolute terms by more than 60,000 people, making it the eighth adjustment, effecting a reduction of more than 500,000 in the unemployment figures, since 1979?
Is the Minister aware that the changes — [Interruption.] I hope that hon. Members will listen, because the accusation against the Government is that they are not giving a clear picture of the position. Is the Minister aware that the Department's claims that the changes are consistent with international practice are not entirely correct, as they involve including the self-employed in the labour figures of the percentage unemployed? That will have the direct effect of reducing the percentage of unemployment figures, which, according to the Library, would reduce the January figures of 14·1 per cent. down to the new Tory international standard of 12·4 per cent. — a 20 per cent. cut at a stroke.
Can the Paymaster General confirm that the method of calculation is not consistent with the international OECD standard and that his Department on 14 January 1985 in a written answer to the hon. Member for Bolton, North-East (Mr. Thurnham) stated that such a calculation would have an unfair effect on the figures? Why did the Department change its decision?
The reason for the change is not only to fiddle the figures ever downwards, but to include the new survey that

the Department is to launch in June this year, which will show inflated figures for the self-employed, which by definition will reduce the percentage of unemployment in the figures. Is it not a coincidence that the new figures to reduce the percentage of the unemployed coincide with the new public relations campaign that the Government have launched at a cost of £1 million to improve their image on employment, which the Secretary of State for Employment has called "compassion in action"? Let the Minister understand that these policies do not kid the electorate, or the unemployed, or the additional 1,000 people who are made redundant by Lucas in Birmingham.

Mr. Clarke: I ask the hon. Gentleman to take the unlikely step of imagining himself, for a moment, in my position or in that of my right hon. and noble Friend the Secretary of State for Employment. The statisticians in our Department said, "We have discovered that a high and unacceptable error is being made in our monthly unemployment figures," and they asked for our permission to correct the error. We gave permission. That was the basis of yesterday's announcement. Is the hon. Gentleman saying that if he were the Secretary of State for Employment he would say to statisticians "No, no—do not correct this mistake. Carry on making what you regard as an error, and carry on turning in each month unemployment figures that are higher than they ought to be."? We know that the hon. Gentleman would not say that, because this morning on breakfast television he was asked that question and he had to agree that he would have made the self-same statement if, as he put it, he had been faced with a reasonably justifiable point of the kind that was put to him.

Mr. Prescott: Yes.

Mr. Clarke: I do not want to advise the hon. Gentleman about how to behave towards civil servants, were he ever to take office, but he has provoked, without my knowing that the person in question was going to do this, the senior statistician in my Department to go public and to make it clear that he asked for this correction to be made. The hon. Gentleman will be able to imagine that my statisticians must privately agree from time to time that they have enough trouble with arguments from me about their figures. I shall go back to my Department and quote the old Hilaire Belloc adage:
And always keep a hold of Nurse
For fear of finding something worse.
We are producing, with professional advice, more accurate figures than we were before. The hon. Gentleman is making a ludicrous fuss about it. He wound up on breakfast television by comparing my right hon. and noble Friend and me to President Marcos of the Philippines because we accepted our statisticians' advice.
Then we get to the question why, when removing this error means that the figures are to appear a fortnight later, we are combining the figures with those for the rate of unemployment and the growth in new employment. The answer is because, a fortnight later, they will come out, in most months, either on the same day or the day before. It is therefore sensible to present them together as one picture of the labour market.
The hon. Gentleman asked about the rate of unemployment that we used. I assume that most right, hon. and hon. Gentlemen know that the rate of unemployment is the number of people who are unemployed at any given


time compared with the number of people who are in work. It is true that, for years, that figure has not included the self-employed and the armed forces. However, because the number of self-employed is increasing, it is becoming steadily less realistic as a figure. The hon. Gentleman says that this is not the international figure. Nor would the one that we should otherwise put out be an international figure. However, there is an Organisation for Economic Co-operation and Development figure which he can have. That is available and the hon. Gentleman can cite it, if he wishes. All these figures are available, as are all the other changes that we are making.

Mr. Robert Maclennan: On a point of order, Mr. Speaker.

Mr. Speaker: I will take the point of order after the Minister has completed his reply.

Mr. Clarke: I believe that we should have a sensible and continuing debate about the policy issues that affect self-employment, unemployment, new employment and the way in which we should deal with these problems. The idea that we should have a debate or an oral statement on the statistics is, frankly, to worry about the footnotes and the methodology of the Department's experts. The hon. Gentleman entirely misses the point of the debate.

Several hon. Members: rose—

Mr. Speaker: I shall take the point of order from the hon. Member for Caithness and Sutherland (Mr. Maclennan).

Mr. Maclennan: I wonder, Mr. Speaker, whether you received notification from the Minister that he was introducing his Budget speech this afternoon.

Mr. Jerry Hayes: I congratulate the hon. Member for Kingston upon Hull, East (Mr. Prescott) on turning hypocrisy into an art form. Will he come to the Dispatch Box this afternoon and deny what he told a television interviewer this morning: that, had he been confronted with the same figures from the Government statistician, he would have done the same? [Interruption.]

Mr. Speaker: Order. Before these exchanges get out of control, may I ask hon. Members please to ask questions of the Paymaster General, not questions about the reactions of the Opposition?

Mr. Michael Foot: If the right hon. and learned Gentleman had such a good case for the new statement of figures that he is introducing, why did he not come and state it himself? Must we attribute it to the bashfulness of his nature that he did not come forward immediately? Since this surreptitious publication of the change, to use no harsher word, and since there was so much objection to the earlier change in the published figures that was introduced by the chairman of the Conservative party when he was Secretary of State for Employment, may we have a guarantee from the Government and the Minister that there will be no further changes in the way that the unemployment figures are presented—at least not before the next general election?

Mr. Clarke: I have come to make an oral statement because of my genuine respect for the House. There was a demand yesterday for an oral statement and I have made

an oral statement. The complaint now is that the statement contains only eight lines. I regarded this, and I still regard it, as written answer stuff. A technical change is being made, at the behest of technical and professional advisers in the Department, in the way that the figures are compiled. I am not responsible for the fact that a political row is being built upon it.
In a debate last week, I challenged the shadow Chancellor to say whether a Labour Government would reintroduce the system whereby the unemployed had to register both at the jobcentre and at the unemployment benefit office simply in order that the unemployment figures could be increased. I challenge the Opposition to say whether they would go back to a system whereby retired schoolmasters and retired bank managers would have to sign on, simply in order to increase the unemployment figures. Of course not. The changes have been made in the interests of accuracy and the figures are more accurate than the previous figures. I do not believe that any Opposition Member would take a different step from that taken by the Government.

Several Hon. Members: rose—

Mr. Speaker: Order. I have to take account of the fact that later this afternoon there is to be an important debate on public expenditure. I have now received notice of a Standing Order No. 10 application and I propose to bring the exchanges on the statement to an end at 4.30.

Sir Dudley Smith: When my right hon. and learned Friend next takes into account possible changes in the unemployment figures to reflect the position even more truthfully, will he also take fully into account the many thousands of people who are merrily working away but who at the same time are drawing unemployment benefit and social security benefit? Is he aware that, despite what the Opposition say, the real fiddling is in that sector?

Mr. Clarke: The labour force survey, the result of which will appear later this year, will reveal another clear picture of the labour market. If past surveys are anything to go by, it will reveal that quite a lot of people who appear in the unemployment count as claimants are not seeking work. The last labour force survey showed that about one third had not sought work in the previous week, either because they were not available for work or because they already had a job. On the other hand, about 800,000 who would probably take a job if one was available do not appear in the count. When we make those corrections, they still produce a lower figure for unemployment than that which the Government normally use.

Mr. James Hamilton: Will the Minister recognise that, no matter how much he fiddles the figures and no matter how hard the statisticians work to give him acceptable figures, Scotland still has the highest unemployment in its history? Will he bear in mind the fact that in Motherwell in two local elections recently the Tory candidate was at the bottom of the poll, with the Communist party candidate defeating the Tory candidate in one case? Will he come clean and give us the true figures?

Mr. Clarke: The hon. Gentleman has accused me with less vehemence than his hon. Friends of fiddling the figures. I hope that sooner or later one Opposition Member will point to the inaccuracy which the Opposition say is


taking place and which lays the foundation for the allegation of fiddling. The fact is that they do not make any allegation of inaccuracy but just make wild allegations. The hon. Gentleman went on to the more serious subject of the problem of unemployment in parts of Scotland and elsewhere. That is why our main activities are devoted not to the blessed statistical arguments about figures, but to producing new policies of assistance to the long-term unemployed, the young unemployed and the others.

Mr. Hugh Dykes: Is the Paymaster General aware that he has completely demolished the absurd position about this entirely technical change? Since he himself referred to the real debate and the real figures of unemployed, is he aware that there is a House of Commons research note in the Library which presumably is objective and which says that, allowing for some double counting, the true figure tots up to 4·9 million? If one knocks off 1 million, one gets 3·9 million unemployed. As it now seems that the public sector borrowing requirement will be about £5 billion instead of £8 billion or £9 billion when the Budget is announced, when will the Government take significant expansionary action to reduce unemployment?

Mr. Clarke: I have not seen that research note. My reaction at this stage is that I do not see how one can remotely and sensibly get anywhere near a figure of 4·9 million as the total unemployed. I shall try to study that and challenge with the Library the methodology, with the assistance of those who advise the Government and who compile our figures. I have never heard of such a figure and I regard it as fanciful. I agree with my hon. Friend that we should he devoting our efforts to what we can do to speed up the rate of job creation and tackle the real problem. Last year's Budget contained significant measures which will boost employment. [HON. MEMBERS: "When?"] The changes in national insurance contributions, which were a major step last year, did not even come into effect until October. I am sure that last year's Budget for jobs is still working through. This year's Budget is the next significant step which we are all awaiting.

Mr. James Wallace: Will the Paymaster General accept that the House was annoyed yesterday not just because the information was given by written answer but because there was a press briefing before the answer was available to hon. Members? As the right hon. and learned Member has said that he does not approve of that practice, can the House assume that that shoddy contempt of the House arose because the decision was taken by his boss, Lord Young, who is not even accountable to this place? If there is such great zeal for accuracy in the Department of Employment, will it seek to give us regularly an estimate of the number who are unemployed but not registered for benefit?

Mr. Clarke: My right hon. and noble Friend and I know nothing of any briefing that may or may not have taken place yesterday and we knew nothing about it at the time. I think that the whole fuss would not have taken place but for the fact that the information was given on the television news yesterday at lunchtime and various Opposition Members got hold of the wrong end of the stick.

Mr. Michael Latham: Is my right hon. and learned Friend aware that, having heard his statement and the hot air from the Opposition, his hon. Friends who sit behind him think that this whole matter is a complete waste of time?

Mr. Clarke: I agree.

Mr. Bob Clay: Since the Minister has refused to give an undertaking that he will not fiddle the figures again before the next general election, may I suggest what the next fiddle might be? He might save a lot of work in his Department if, instead of getting his statisticians to estimate the figures, he asked the Metropolitan police, who estimate the numbers on nuclear disarmament demonstrations in London, to do it. In that way he would probably crack the problem completely.

Mr. Clarke: The hon. Gentleman repeats the allegation of fiddling. Although he cannot reply, I ask him what he would do when faced with the statistician's position. Is he really saying that we should put back into the figures 55,000 phantom people whom we know are not unemployed so that we may inflate the figure to what it was previously?

Mr. Christopher Chope: Will my right hon. and learned Friend agree that it is a grave insult to the record number of self-employed to insinuate that they do not work and that they do not count? Does he agree that the significant statistics are the net increase in new jobs each month and the proportion of the population in work? Will he ensure that when the statistics are published there will be simultaneous publication of our favourable record compared with our European partners?

Mr. Clarke: I am grateful. I agree that we must accept that more and more people are becoming self-employed. That has been the trend for many years; it will be increasingly the trend in future and it is wholly desirable. Therefore, any unemployment figure that takes no account of the self-employed is not realistic or useful. I think that in due course the Opposition will realise that.

Mr. Terry Davis: Will the Minister confirm that the last time the Government dared to publish a labour force survey the figures showed that the Government's statistics exaggerated by 110,000 the number of people employed? Since there is a strong possibility that the present statistics exaggerate the number of people who are self-employed, as well as the number who are employees, why have the Government postponed the publication of the 1984 census of employment which they originally promised to publish before Christmas?

Mr. Clarke: We do not postpone these things. It is not a question of when we dare to produce things like the labour force survey results. We publish them when they are ready and when the statisticians are prepared to put their professional reputation on the line. I quite accept — [Interruption.] Before Opposition Members start to make false points again, they should remember that, when we produce figures for the number of new jobs and the number of self-employed month by month, they are the best estimates that can be made on past trends and on the last labour force survey. When we get the results of the next labour force survey we will know what the figure is; it may be more or it may be less. I assure the House that we


publish the figures and stick to them; we stick to the best professional estimates that can be made on them thereafter.

Mr. Tony Baldry: Will my right hon. and learned Friend agree that the important criteria when considering unemployment statistics are that the methodology should be consistent month by month and that the figures should be as accurate as possible? Do not the changes mean that the figures will be more rather than less accurate? As there seems to be some doubt among the Opposition about the alleged fiddle, will my right hon. and learned Friend arrange for a briefing from his statisticians to be placed in the Library to show exactly the methodology adopted so as to give the Opposition a chance of identifying where the alleged fiddle takes place? Clearly, a fiddle does not exist.

Mr. Clarke: I am quite happy to say that my Department will continue to make available as much information as is wanted about the methodology that is used. There is a publication known as the Employment Gazette which sets out in copious detail exactly how the figures are produced. I agree with my hon. Friend that it would be a courtesy to the House if the Opposition would specify exactly the error or mistake that they claim gives rise to a fiddle. The methodology of the Opposition appears to be to think of a figure which might be the number of unemployed and double it.

Mr. Terry Lewis: Is the Minister aware that the country will see this as the fourth cosmetic attempt — [HON. MEMBERS: "Eighth."] — the eighth cosmetic attempt to drive down the unemployment figures? Will the Minister address himself to the problem of the 7,000 people who are without jobs in my constituency? Will he tell them that they are phantoms and that they are hypothetical?

Mr. Clarke: The people to whom I referred as phantom unemployed are the extra number who, as it turns out, were counted in error. The Opposition spokesman, the hon. Member for Kingston upon Hull, East (Mr. Prescott), has agreed so far that he would have made the change that we have made. I am still waiting to hear what change in what we are proposing the Opposition would make. If they came to office, I do not believe that they would tell the statisticians to start inflating the figures.

Mr. Richard Alexander: Is it not clear from the Opposition's reaction that they are far more interested in making political capital out of the unemployed than in the accuracy of the figures?

Mr. Clarke: I am not sure what they are making, but I believe that they think that they are making capital, or they did when they started on this tack.

Mr. Bruce Millan: Is the Minister aware that the effect of this further manipulation of the unemployment figures, added to recent Government behaviour over Westland and British Leyland, will be that hardly anyone will believe any Minister on anything?

Mr. Clarke: The right hon. Gentleman has considerable experience — far more than I have — of being in government and playing a responsible role in

government. Is he asserting that when in office he has told his statisticians to to perpetuate an error, which appears to be the suggestion of some Opposition Members?

Mr. Tony Marlow: I am sure that my right hon. and learned Friend is aware that the House and the country want the truth. I am sure also that he is aware that there are 774,000 unemployed in the south-east, including 400,500 in Greater London. I am told, and I am sure that my right hon. and learned Friend is as well, that there is a shortage of people looking for work and that there are too many jobs and not enough people taking the work. Obviously there is an element of voluntary unemployment. The truth that the country wants to know is how many of the members of the permanent labour force cannot get jobs. It seems to be a far lower figure than the figure that we have now.

Mr. Clarke: I agree with my hon. Friend. The position varies greatly in different parts of the country. I was in Peckham yesterday, and within Southwark there are more jobs than residents. There are many unemployed in Peckham, partly because they do not have the necessary skills and training to enable them to apply for jobs that are taken by others living outside the area. In the south and the midlands especially, there are those who appear in our count as unemployed, and when we hold a labour force survey they turn out to be already in work or not currently searching for work. The position is complex and we should address ourselves to helping those who really matter—those who are genuinely unemployed—when considering these figures.

Mr. John Evans: The number of questions following the Minister's statement reflect the fact that we should have been presented with a proper statement from the right hon. and learned Gentleman instead of an eight-line statement. Will he inform the House and the country why he has introduced a change in the statistics which 12 months ago the Department refused to accept on the ground of unfairness? Will he deny that the changes that he has introduced will reduce the percentage from 14·1 to 12·4 without creating one job? Will he confirm that this is the eighth adjustment of the unemployment figures that has taken place since the Government took office, and that if this method of producing statistics had been used by the previous Labour Government there would have been fewer than 800,000 unemployed in 1979?

Mr. Clarke: Some of the changes that we have made have increased the number who are regarded as unemployed. The change that affected the severely disabled increased the total by about 23,000, and the change which led to signing on in unemployment offices once every fortnight instead of once a week increased the total by about 20,000. However, these changes have been made for the sake of accuracy. As for the rate of unemployment, the hon. Gentleman can have the old figure which excludes the self-employed and those in the armed forces if he wants it, or he can have the new figure, which includes them. In my opinion, the new figure is better. It strikes me as entirely artificial to have a rate of unemployment which ignores the fact that there is a rapidly growing number of self-employed.
Later—

Mr. Greville Janner: On a point of order, Mr. Speaker. The House has heard with concern a


Minister's statement which has a profound political effect and which related to the change in the way in which unemployment figures and statistics are to be produced—

Mr. Speaker: Order. It sounds as if the hon. and learned Gentleman is about to complain that he was not called when questions were asked following the statement.

Mr. Janner: No, Mr. Speaker. I ask that you be kind enough to consider, Mr. Speaker, whether it is in order for a Minister in such circumstances to blame civil servants for the change in the methodology used to produce the figures rather than himself. It is almost unknown for a Minister to say that upon the advice of his statisticians and at their request a change has been made, rather than taking the blame himself. It is a matter of privilege if not one of order.

Mr. Speaker: If it is a matter of privilege, the hon. and learned Member knows what he must do about that. I am not responsible for what is said from the Front Bench or even from the Back Benches.

Early-day Motions

Mr. Gerald Bermingham: On a point of order, Mr. Speaker. May I draw to your attention a mistake that appears in today's Order Paper in respect of early-day motion 459, to which my name has been appended? I checked the matter with the Table Office, which confirmed that I did not sign the document. I was told that the instructions given to the printer did not contain my name. When an error of this sort is made hon. Members find themselves in considerable embarrassment in their constituencies and elsewhere. The contents of early-day motion 459 are completely and utterly anathema to me; it is a motion to which I would not he a party. Perhaps steps can be taken to ensure that neither I nor other hon. Members are placed in this embarrassment in future. Perhaps the printers concerned will convey an apology in due course.

Mr. Speaker: I thank the hon. Gentleman for drawing this matter to my attention. I have made inquiries and I accept fully that embarrassment has been caused to him. An error was made at the printers and I shall ensure that the necessary corrections are made.

Sedentary Interventions

Mr. John Butterfill: On a point of order, Mr. Speaker. I should like to draw your attention to a serious error in the Official Report of our proceedings in the report of the debate on the private rented sector of housing which took place last night. During the debate, the hon. Member for Birmingham, Perry Barr (Mr. Rooker) said, "We want the Rent Acts to be strengthened, not weakened." At that point I made a sedentary interjection. I said, "They should be scrapped." Unfortunately, it appears that the Official Report heard only the last word, "scrapped". However, it did not hear that word correctly because the word that appears in the Official Report is a four-letter word that I would not personally use but which is not dissimilar to "scrapped".
I can understand the difficulty, especially when sedentary interjections are made, of those who are members of the Official Report. I hope that the error was not a Freudian slip on their part in response to the speech of the hon. Member for Perry Barr. I regard this as an extremely serious matter, and I hope that the error will be put right.
On making a complaint about this matter in the office of the Official Report, I was told that this was not the first time that the word in question had been used in the Chamber—

Mr. Speaker: Let us not deal with that. I have looked into this matter. If Mr. Deputy Speaker, who was in the Chair at the time, had heard the word which appears in print in the Official Report, he would have ruled it out of order. I accept that it is not a word that the hon. Member for Bournemouth, West (Mr. Butterfill) would use. However, this sort of thing is likely to happen when Members make comments from a sedentary position.

Mr. Jeff Rooker: Further to that point of order, Mr. Speaker. I did not hear the word uttered that is printed in Hansard, and I think it important that the record should be corrected. It is important also that we have it on record for the electors of Fulham that another Tory Member wants the Rent Acts to be scrapped.

Mr. Speaker: I should have said to the hon. Member for Bournemouth, West that I shall, of course, have the record corrected.

Forestry Commission

Mr. Brynmor John: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the request of the Ministry of Agriculture, Fisheries and Food to the Forestry Commission to draw up plans to sell off its holdings.
This will mean that 3 million acres of public woodland will be sold off and that will raise £1,500 million for the Exchequer.
The matter is specific because it deals with a press release, issued at lunchtime today, through the Government's favourite method of communication, the Press Association. It is urgent because it involves the country's assets and the future of the rural environment. It also involves employment in Britain. It is urgent because it is yet another example of the bypassing of Parliament and of plans being drawn up without an opportunity for an important debate. The only way it can be debated is for the House to be adjourned and the matter to be properly brought before us.

Mr. Speaker: The hon. Member for Pontypridd (Mr. John) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter which he thinks should have urgent consideration, namely,
the request of the Ministry of Agriculture, Fisheries and Food to the Forestry Commission to draw up plans to sell off its holdings.
I have listened with great care to what the hon. Gentleman has said and I also listened to the exchanges in the House during business questions. I regret that I do not consider the matter that he has raised to be appropriate for discussion under Standing Order No. 10. Therefore, I cannot submit his application to the House.

Public Expenditure

Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition and his right hon. and hon. Friends.

The Chief Secretary to the Treasury (Mr. John MacGregor): I beg to move,
That this House takes note of the White Paper on the Government's Expenditure Plans 1986–87 to 1988–89 (Cmnd. 9702).
I welcome this opportunity to open the annual debate on the Government's public expenditure White Paper. I should like first to refer briefly to the role of public expenditure in the economic strategy; second, to outline the main features of this year's White Paper; third, to respond as is customary to the report prepared on the White Paper by the Treasury and Civil Service Select Committee; and, finally, to say something about two other key issues, value for money and capital expenditure.
There are many reasons why restraint of public expenditure to levels the nation can afford lies at the heart of the Government's economic strategy for achieving a strong economy with low inflation. First, experience has taught us that restraint of public expenditure is essential if inflation is to be held down. In the 1960s and 1970s almost all industrial countries saw public expenditure rise faster than national income. In part this reflected the view that public spending could be an engine for growth and could sustain employment. In part it came from the rise in the pressure group society—and of course there are always boundless good causes —and the failure of Governments to make the choices required of them. In part it arose because the systems and mechanics for controlling expenditure were inadequate, especially in the face of rising inflation. How well some of us recall what planning in volume terms did for control of public spending under the last Labour Government.
In Britain public expenditure rose from around 35 per cent. of GDP in the early 1960s to around 45 per cent. at the start of the 1980s. This was accompanied by accelerating inflation, increasing debt, rising unemployment, increasing uncompetitiveness and, hence, slow destruction of many of our industries. There is little empirical evidence here that public spending was strengthening our economy, thus shattering the thesis that throwing more taxpayers' money at any problem produces higher growth and more jobs. Between 1970 and 1980 spending in the economy in money terms rose by 35 per cent. —but only 19 per cent. of that was real output. The rest was dissipated in rising prices.
The realisation that expenditure should be planned against a prudent assessment of what the nation can afford —that finance should determine expenditure and not the other way round —is now widely shared. For when growth fell short of optimistic assumptions, it was not public spending that was cut back. It was the private sector that took the rap in higher taxes, higher interest rates, and hence an inevitable squeeze on output and on its contribution to GDP. The burden of creating the wealth was falling on fewer and fewer shoulders—the process of transferring wealth was assuming a larger and larger share of GDP.
Secondly, restraint in public spending is essential if the overall amounts recouped in direct taxation from the pay

packets of people, often with very modest incomes, are to be reduced and if we are to overcome the problem of incentives to work.

Mr. Roy Hattersley: If the Chief Secretary has completed his initial passage, I wish to correct a slip of the tongue which he has made. The right hon. Gentleman says that GDP rose to its peak in the early 1980s. Its peak was in the mid 1980s after five years of this Government.

Mr. MacGregor: I do not recall saying that.
Today I am looking at the long-term picture and making no comments about the interrelationship between public expenditure and taxation in the next few weeks. The message of the Green Paper on longer term trends in public expenditure and taxation published two years ago was that if we are to reverse in time the rising trend of taxation, then restraint of public expenditure must be sustained over a number of years. In a world where there are so many uncertainties outside our own control —the House is very conscious of the impact on tax revenues of the falling price of oil recently —sticking to prudent targets of public spending is more vital than ever.
Thirdly, restraint of public spending goes even wider than improving the way our economy works, critical though that is. It is at the heart of the kind of society which this Government are seeking to build: a society based on choice, on freedom and on responsibility; a society in which people keep more of what they earn to spend or save as they decide; and a society in which industrial and commercial companies are left with greater capacity of their own to invest, and to earn a good return.
The White Paper that we are debating today is an important part of that strategy. As the House knows, it represents the final stage in the annual review of public spending, which began almost a year earlier. It sets out the Government's plans for spending over the next three years, but obviously in greater detail and with more precision and finality for the first year. With a document as bulky as this—some 400 pages—within the limited time at my disposal, the House would not expect me to do other than touch on the broad themes.
The first message is that public spending is under control. In this year, 1985–86, we expect it to be lower in real terms, even after allowing for the effects of the coal strike, compared with 1984–85. The remorseless growth in public spending has been stopped. The White Paper shows that for the three years ahead spending in real terms is expected to remain broadly stable at around this level. As a result, during the period of the plans, public spending as a percentage of national income will fall, and that applies however the proceeds from privatisation are treated. Let me say to the House that I am well aware, of the immense difficulties in consistently implementing a prudent and sensible expenditure policy, and I am not so naive as to believe that simply wishing it makes it so.
Secondly, within this overall objective some deliberate choices have been made to increase spending now compared with the last White Paper—in other words, additional sums compared to what we spent a year ago. The priorities I would single out are employment measures —first announced in last year's Budget—and increased spending as a result of the public expenditure survey round on the Health Service, on roads and on renovation of public sector housing.

Mrs. Elaine Kellett-Bowman: Will my right hon. Friend add to his priorities important research and development upon which the whole future of this country will depend? If we do not keep up our basic science funding, especially in the universities, we shall never keep up with our competitors abroad.

Mr. MacGregor: I was singling out the main priorities. We have increased expenditure on research and science spending in the universities this year compared to last year. I am sure that my hon. Friend will agree that if one makes international comparisons then one of the main features of this country has been the low level of research and development spending by industry. There is also the pull through from basic research, often publicly funded, into products and processes in the manufacturing industries which can be sold. It is to those sectors that we need to devote as much attention.

Mr. Tam Dalyell: Has the right hon. Gentleman seen the annual report of the Medical Research Council, which talks in its foreword of the severely damaging effect of the financial situation on medical research? Will he pay special attention to that?

Mr. MacGregor: I have not seen that annual report. We look at these matters from year to year. I was involved in the agricultural research spending sector, where we have reduced the amount of money by comparatively modest sums. Many sensible decisions can be taken on that basis by changing priorities to ensure that we can get value for money from research.
I have another point about the broad theme of this year's White Paper. A feature of it—building on improvements in recent years—is the extent to which, throughout its pages, and especially in the departmental programmes in volume 2, large numbers of examples are given of better value for money, achieving more in terms of output of goods and services for the same amounts of money as before. We are talking of huge programmes and huge sums of money, although to listen to Opposition Members one would not always think so. The emphasis on getting better value for money and better output for the same amount of money going is of particular importance. We are determined to go on getting value for the money that we spend on behalf of other people. We are always conscious of the fact that the Government are not a spender in their own right but the trustee for the money raised from families and business.

Mr. John Townend: My right hon. Friend said that revenue determines expenditure. There has been a significant drop in oil prices and therefore a large drop in oil revenues, which has happened since the public expenditure White Paper was prepared. If revenue determines expenditure, does this fact not make the White Paper out of date and should we not be reviewing our public revenue and expenditure targets?

Mr. MacGregor: I shall be making one or two comments later in my speech about progress on the public expenditure front for expenditure for this year. My hon. Friend will know that the overall statement about the economy is one for my right hon. Friend the Chancellor in his Budget statement, and I am sure that he will not expect me to say anything in advance of that. The principles of responsible budgeting, of careful choices of priorities and of better value for money are the hallmarks of this White Paper.
I move on to the report of the Select Committee on the Treasury and Civil Service, which will also enable me to touch on a number of other important matters in this White Paper. Not long after I entered this House, I became a member of this Committee's predecessor, the general Sub-Committee of the Expenditure Committee, and found it a most rewarding Committee on which to serve. I have always been greatly interested in its work and in the major contributions that it has made to previous expenditure debates and to the improvement of the White Paper itself, and this year is no exception. I know the pressures under which the Committee has to work, although I hope that the fact that we have been able to bring out the White Paper earlier this year than for many years —indeed I am tempted to say almost as early as I think it may now be possible to achieve it—has helped the Committee in its own work.
I am grateful to the Committee for the welcome that it has given to the further presentational improvements in this year's document. Without question, the document has been becoming more informative, easier to follow, and more linked in with the other parts of the public expenditure process over the years. This is in large measure due to the constructive dialogue which my predecessors and my officials have had with the Committee, and I assure the members of the Committee, and the House, that a great deal of effort goes into responding constructively to its helpful suggestions.
This year, apart from straightforward presentational improvements, there are three particular points to which I draw attention. The first is the shift to analysing spending chiefly by Department rather than by programmes. The second is making it easier for the House to relate material in the White Paper to the figures in the Supply Estimates for 1986–87 to be presented on Budget day. The third is the increased emphasis on the description of what public spending is achieving, rather than just setting out the resources being used. So I am grateful to the Committee, and in particular to my right hon. Friend the Member for Worthing, (Mr. Higgins), for its bouquets. The barbs of course I expected, and they too are there. Perhaps I can now respond to them.
The Committee has cast some doubt on the credibility of the aggregate planning totals. This is a crucial point, not just for those who follow these matters in the House, but for many interested bodies outside, and I shall deal directly with it.
The first point of which the House will want to be aware is my estimate that in the current financial year we remain firmly on course for achieving the planning totals set at the time of last year's Budget. There have been substantial upward pressures on spending to absorb, such as the continuing cost of the coal strike, higher local authority expenditure and the cost of the last social security uprating. Although it is still too soon to be certain, all the signs available to me show that we have been able to meet these pressures within the reserve that we have set aside for such unforeseen contingencies, and that the outturn will be within the planning total that we set at the time of the last Budget. That is one point to give credibility.
Next, in 1985–86, considerable amounts have had to be shifted from the reserve to social security, export credit and agricultural programmes to take account of the change in economic factors—the inflation blip in the context of the first, higher interest rates for existing export credit facilities in the second and the big increases in agriculture


support intervention costs arising from the operation of the CAP and the record cereal harvest of 1984. In this White Paper, for 1986–87 we have taken account of the effects of these directly in the programmes themselves, and they have involved large additions to them. This means, I hope, that we have already anticipated what last year were adverse movements in economic and other assumptions. Therefore, we should not have to meet such additions from the reserve in the coming year. That is another reason for credibility.
Moreover, the House will note that the reserves for the next three years are higher than in any previous White Paper. That of itself seems to concern the Committee, which says that it involves
a significant diminution in the value of the White Paper as a guide to government intentions",
by which I suppose that it means that more should have been transferred from reserves into programmes.
It would be so much easier in one sense if we could have a precise planning process unclouded by uncertainties in the three years ahead. But that is not the world in which we live, and the Government are not unique in having to grapple with this problem. Any business in drawing up its corporate plan on the spending side must make sufficient allowances for uncertainties too. I would have thought that the fact that we have larger reserves than before in this White Paper is not a failing, as the Committee seems to imply, but rater a virtue, and. I believe that it lends greater strength to its credibility.

Mr. Robert Sheldon: Many of us saw that comment by the Committee and were impressed by it. If the Government have public expenditure under control, one would assume that the reserves can be allowed to fall, not to rise. We are faced with an unattributed reserve that should be allocated to the programme if the Minister is as successful as he says that he is.

Mr. MacGregor: I believe in prudence. There is also the problem about local authority spending in the past two years, which I have discussed with the Committee, although I do not want to go into detail now. The overall point is that the fact that we have managed to keep the planning totals where they are and still have high reserves is a sign that we are pursuing a prudent and sensible public expenditure policy.
In its meeting with me and in its report, the Committee devoted a good deal of attention yet again to how, within the planning totals, relative priorities are set. The Opposition amendment also refers to this. I shall give a few reflections on this subject, as a relative newcomer to the inside, as it were.
I agree entirely with the Committee that this is a key issue, because a clear view of priorities and the willingness to make the hard choices involved are at the heart of public expenditure control. The Labour party's approach to priorities is that of "Animal Farm" —all priorities are equal but some are more equal than others. I am not even sure about some being more equal than others. Every spending idea seems to be a priority. That, of course, is how it lands itself with a bill of a further £24 billion.
I should like to turn to some of the specific criticisms made by the Committee. First, it is argued that the process of setting priorities is too bilateral —I suppose that means between me and the spending Minister—and that no overview at any stage is taken between Departments.

That is not so. As several charts in the White Paper make clear, there have been substantial variations in the relative position of different programmes over the years. Some have grown substantially in real terms, others have declined in real terms. If the mechanisms were purely bilateral and within Departments, as the Committee fears, this would not have happened.
I should like to refer to chart 1-11 on page 20 of volume I. This shows that between 1978–79 and the end of this White Paper, 1988–89, there have been quite significant variations between different programmes. In the interests of making progress, I will not read them all out, but chart 1-11 demonstrates that when one takes into account the sums involved these changing percentages reflect substantial shifts in priorities.

Mr. Terence Higgins: I am not sure that what my right hon. Friend is saying is logically correct. It would have been quite possible for priorities to vary between different programmes when the entire process was done by bilateral agreement, depending on what pressure the Chief Secretary of the day happened to put on one Department as against another.

Mr. MacGregor: Yes, it would, but that was only my first point and it was made to demonstrate that there has been an overall view of changing priorities.

Mr. Austin Mitchell: The first point was wrong.

Mr. MacGregor: No. It demonstrates in practice that there are substantial shifts in priorities.
It is argued that the public expenditure process is all about changes at the margin and that it should be, to use the jargon, more zero based. For those who are not accustomed to the jargon, which I am sure does not include any hon. Member present, this means looking at each programme anew each year and judging its relative priorities. I grant the Committee that we do not have a full zero based system, but I make two points. First, the Committee makes some mild criticism of the fact that individual Secretaries of State proposing increased expenditure are asked if they can find offsetting savings. Most Secretaries of State are responsible for several billion pounds of expenditure and it is perfectly reasonable, in the first instance, to ask them to consider what adjustment could be made to their own priorities. Second, in a sense this is asking them to do zero basing themselves.
I suspect that the view that the public expenditure round each year is only about changing minor things at the margin arises because of an excessive concentration on the closing stages of the survey. By the time Cabinet meets, normally in November, the options facing it will be limited in scope, but the process starts much further back than that. I am already discovering that it is like the Forth bridge and I am already embarking on the re-painting programme for next year.

Mr. Dalyell: As the hon. Member for the Forth bridge, I can say that it has structural problems.

Mr. MacGregor: I know the Forth bridge extremely well and that was certainly not meant to be an uncomplimentary remark. There is, of course, no ideal system for setting priorities, and if we had an academically or theoretically perfect system it would not work. There are many decisions, some small, some major, to be taken through the year. It just does not all happen in the basic


public expenditure round. Outside events and changing economic assumptions can have a material effect on plans. Ministers have to make judgments individually, bilaterally and collectively on a range of issues, and have to take into account the many pressures upon them, not least from hon. Members in this House, and to judge what is sensible and acceptable. It is not just in the annual PES round that priorities are set and decisions are made.
Although the Government do not operate a formal zero-based budgeting system of the kind that has been tried abroad, we do ensure that a number of areas of policy are fundamentally reviewed each year. These reviews will ask: is this programme essential, does it have to be carried out in the public sector, has its objectives kept pace with changing circumstances and can these objectives be achieved more economically?
Over the past two years there have been major reviews into virtually every aspect of social security expenditure, accounting for nearly one-third of public expenditure. Those reviews have covered regional policy, urban policy and National Health Service purchasing of drugs, and there have been numerous smaller reviews into other areas of policy. There are few areas which have not been reviewed in recent years. The results of these reviews were discussed collectively so that before decisions are taken in the closing stages of the survey Ministers will be able to form views of the relative merits of different programmes.
I apologise to hon. Members who are not specialist devotees of public expenditure rounds for the time I have given to this subject, but I thought it worth doing so because I know that it greatly and rightly exercises the minds of those who are specialists. As I said at the outset, no system is perfect. I hope that I have said enough to refute the accusation that the Government's decisions are no more than the push and shove of politics, because they reflect a well considered view of priorities. That is why we have been able consciously to raise spending, and considerably in real terms on health, where expenditure is up 20 per cent. in real terms under this Government, on pensions for the increasing number of our elderly, and on strengthening our defence, where spending is up 30 per cent. since 1978. That has now stabilised, however, and the programme will be declining slightly in real terms because we now have the benefits in equipment and in many other ways, including better public sector procurement, to achieve more for the same amount of money. Spending in the fight against crime is up 40 per cent.
We have been able to achieve this by reducing the size of the Civil Service, saving £750 million per year; by cutting our contributions to the European Community; by reducing the subsidies to industry which were of doubtful economic value; by spending less on building council houses, reflecting the overwhelming desire of people to own their own homes and not to have the town hall as their landlord. We have made positive priority decisions. They reflect the right priorities and ones which are in accord with the wishes of the people.
I referred earlier to the increased emphasis in this White Paper on what public spending is achieving. Public expenditure control is as much about achieving more in goods and services for a given unit of taxpayers' money as it is about simply controlling the amount of money going in. We have to look constantly for value for the

money we spend on the taxpayers' behalf. This is an unglamorous area in that it does not immediately excite public attention, but at the end of the day it is what matters to the citizen who is the recipient of public services. This White Paper records the substantial progress that has been made. It contains over 1,200 output measures and over 100 forward looking performance targets, and we must aim to do better each year.
We have a number of weapons in our armoury. In central Government, Departments' efficiency scrutinies have brought savings of £300 million a year and multi-departmental reviews have led to targets to save £400 million a year on Government purchasing within two years, and £50 million a year on office accommodation. Within individual Departments we see the results of the emphasis on value for money. In defence, competitive tenders have saved £60 million on the estimated cost of the new RAF trainer, and £100 million on the production contract for the Army's new mechanised combat vehicle. In the Health Service, £150 million of efficiency savings are planned in 1985–86 and more in 1986–87.
We are getting 20 per cent. more roads for the same amount of money as we were getting five years ago. Contracting out of services for central Government and the National Health Service has brought a net saving of £50 million a year.
All these figures sound impressive, but it is when one gets down to what they mean in terms of increased goods or services elsewhere that their true impact becomes clear. The net saving in the reduction in the number of civil servants employed to administer public spending equals the building of 20 new hospitals a year. [Interruption.] We are building them. In the last few years there have been 150 hospital building projects and that programme is well up on any programme by the previous Government. The savings in defence amount to more than the cost of a type 23 frigate, of 10 new Harriers or of over 100 new Challenger tanks. Value for money is worth stressing because this is the occasion when we can draw attention to the substantial progress that has been achieved through a lot of hard work.
Capital expenditure is one area to which the Labour Government gave very little priority. Our record compares favourably with that of the Government in which the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) served. Under Labour total capital expenditure fell in real terms by 20 per cent. Under this Government, capital expenditure has continued at a substantial level and is currently running at some £21 billion a year. That level has been broadly stable in real terms. There are two priorities to which we have devoted such attention. One is the Health Service. Capital expenditure on the Health Service, to which the right hon. Gentleman referred, fell by 38 per cent. under Labour and has risen by 12 per cent. in real terms under the Conservatives.

Mr. Robin Corbett: There are fewer beds.

Mr. MacGregor: There are not fewer beds.

Mr. Corbett: There are in the west midlands.

Mr. MacGregor: Expenditure on roads, capital and current, by local and central Government fell by 36 per cent. gross under Labour and has risen by 10 per cent. in real terms under this Government. By their performance


and record do you judge them. The House should consider the package in our plans and in the White Paper. It should consider the railways, for example. Next year, rail investment is planned to be 9 per cent. up in real terms on this year. Water is up by 4 per cent. in real terms. Trunk roads and motorways are up 5 per cent. in real terms. As for housing renovation, capital expenditure has increased by more than 35 per cent. during the past few years and is expected to rise a further 4 per cent. in real terms next year. I have already referred to the health authorities. That is a record of increases in priority areas of which we can be proud.
Moreover, capital expenditure, as shown in the White Paper, does not tell the whole story about capital expenditure on infrastructure. We ought also to take into account spending on repair and maintenance, which has grown in real terms and now approaches £5 billion a year.
Some commentators, including the Treasury and Civil Service Select Committee, have looked at the capital spending plans in the White Paper for the period ahead and concluded that the trend is downwards. The Select Committee makes the understandable error of comparing the outturn figures in the White Paper — expenditure incurred—with plans, without making any allowance for future capital spending from the reserve. As we get nearer to the years in question and shift sums from the reserve into specific departmental programmes, capital expenditure will feature in that. It is the outturn figures in the three years ahead that we must consider.
It is also necessary to take into account the fact that, for very good policy reasons, capital expenditure is sometimes switched out of the public into the private sector, and thus reduces the overall public sector figures on that account. I have in mind the continuing impact of our policies to switch provision to the private sector in housing. The figure that ultimately matters is the total capital investment in the economy. Last year, it was at a record level of about £60 billion, with a further increase expected this year.
I have dwelt on the value for money aspects of the White Paper because of the need to spell out its importance, because our record is increasingly an impressive one and because I do not think that the Labour party begins to understand its relevance to managing the public expenditure programme as a whole, just as it does not subscribe to the need for a prudent economic policy. For Labour all that matters is being seen to spend more.

Mr. D. N. Campbell-Savours: Will the Minister give way?

Mr. MacGregor: I am coming to the end of my speech. I have spoken for a long time. The hon. Gentleman will be able to make his speech. Very well; this really must be the last time.

Mr. Campbell-Savours: Page 278 of the White Paper refers to the need in Ulster for expenditure to be
higher than on comparable programmes in Great Britain.
Why do we have these ever-escalating levels of expenditure in Ulster when the level of unemployment in Ulster is no greater than in the northern region, and other parts of the United Kingdom? What is so special about Ulster that it seems to have a very special place in the Government's heart?

Mr. MacGregor: I cannot remember every line of the White Paper.

Mr. Campbell-Savours: I have told the right hon. Gentleman what it said.

Mr. MacGregor: Indeed, the hon. Gentleman has, but I have not had time to look it up. I think, from memory, that the point is that there is an extra security aspect in those figures. My right hon. Friend the Financial Secretary to the Treasury will happily deal with that when he winds up.
I can quite understand why the hon. Gentleman wanted to interrupt my flow. All that matters for the Labour party is being seen to spend more—until the chips are down and those who have to pay suddenly wake up. I said last week that we have been calculating the cost of Labour pledges. Leaving out one-off promises and renationalisation, the cost so far is £24 billion extra a year. I was charitable to the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). I conceded that if he ever found himself having to preside over a public spending programme, he would be forced to trim. Indeed, he is beginning to show signs of panic already—like the host at a party who promised everyone a splendid binge but, as the food and drink bill began to mount up, took fright at the hangover that everyone would face the following day and so began to hack away at the wilder commitments that he and his colleagues had made. He cannot get away from the fact that his colleagues, in criticising our spending plans, are constantly promising more. I shall give a few examples. He asked me to do so.
Last summer, the Leader of the Opposition committed a new Labour Government to doubling aid within two or three years of taking office. That is a fine pledge, but even on a conservative assumption of the build up, it amounts to about a further £900 million. I notice how the hon. Member for Thurrock (Dr. McDonald) is starting to mutter. Perhaps she will listen to some of these commitments and tell me whether I am right.
At the end of last year, the Opposition's industry spokesman committed himself in Tribune to increasing industrial support by at least 50 per cent. He gave no indication of its cost effectiveness. He gave no assessment of how much money was thrown down the drain in unwise industrial support during the time of the Labour Government. That amounts to about a further £1,100 million a year.
The Labour party remains committed to giving a substantial weekly grant to over-16s in full-time education. Does that remain the commitment, or does the right hon. Gentleman disown the "Charter for Youth" of June 1985? If not, the sum is a further £965 million a year.
In the document "Working Together" last year, there was a commitment to a 35-hour week. The cost in the public services alone would be some £3 billion a year. I shudder to think what it would be for the private sector. Has that been abandoned?

The Financial Secretary to the Treasury (Mr. John Moore): Answer.

Mr. MacGregor: The right hon. Gentleman will have plenty of time to answer. Labour has also committed itself, at its 1983 party conference, to introducing a minimum wage of two thirds average earnings, costing another £1 billion from the public purse alone. This amounts to a legal obligation on the lower paid to price themselves out of work. I wondered whether the right hon. Gentleman might say that a 1983 conference pledge is no longer valid, but


I see that the hon. Member for Oldham, West (Mr. Meacher) repeated the pledge in Tribune last week. I know that the right hon. Gentleman has already had to slap down his hon. Friend on one proposal, so perhaps he could say which member of the Opposition Front Bench will win on this one.
There are proposals to phase out independent schools, or have they gone too? That would cost a further £300 million, at a conservative estimate.
That all amounts to several billion pounds extra on the expenditure programme. I give it to the right hon. Gentleman that I am sure that he knows the lunacy of commitments on this scale. He knows the massive crisis of confidence that it would create in the economy, the huge inflation and the destruction of jobs on a scale that would rapidly outdo those that he was trying to build up. If he is to sound at all credible, he has to get some grip on his colleagues. The Opposition Front Bench have to come clean and stop pretending that they can undertake so many of these programmes.
The contrast is clear. The Labour party has a programme of massive public spending that would do immense harm to the economy and impose a tax burden on our people that they would find quite insufferable. The 41 per cent. VAT rate that I put to the right hon. Gentleman last week gave him the benefit of many doubts. We, however, have spending programmes that have enabled us to increase substantially in real terms the right priorities. They have contained the overall programme within what the nation can afford and contributed to the economic policies that have produced the longest period of sustained growth for many years. The White Paper continues that programme, and I recommend it to the House.

Mr. Roy Hattersley: I beg to move, at the end of the Question to add:
'but deplores that once more the Government's expenditure plans compound the errors of previous years and therefore further increase the prospects for higher unemployment, inhibit investment, inflict additional damage on industry, intensify the severe shortage of adequate housing in many parts of the country and demonstrate the bankruptcy of this Government's economic philosophy which chooses to finance increases in unemployment rather than additional employment opportunities.'.
You were in the Chair, I think, Mr. Deputy Speaker, and therefore will recall that last Wednesday, in the debate on unemployment, the Chief Secretary categorically promised that he would today, on what he described as the appropriate occasion, answer a question which I put to him directly, and one which the country has asked for six years, that is, why do the Government choose to spend national resources on the cost of keeping men and women unemployed when they could invest the country's wealth in capital programmes which would begin to put Britain back to work and at the same time build desperately needed houses, replace decaying schools, renovate other areas of capital necessity and rebuild our collapsing sewers.
I do not believe that the Chief Secretary even attempted to keep that promise. But he did, refer to another item in the debate last week. In the last passage of his speech—what he no doubt regarded as a peroration — he reproduced the assertion he made eight days ago, that the

programme of the Labour party committed that party, when it came into power, as he is right to anticipate, to increase spending by £24 billion.
The Chief Secretary explained last week that careful calculations had been made by the Treasury. He said that their computers and their recording machines were hot with the work that they have been doing. Therefore, taking him at his word, I assumed—for this must be the case if what he told us was true—that the careful calculation was there in the Treasury file waiting to be taken out, photographed and sent to me.
I therefore wrote to the Chief Secretary and asked him for it. After six days of havering, and conversations between his private office and mine, I received late yesterday afternoon a letter which told me that he either could not or would not supply me with the careful calculations he claimed the Treasury had made. Of course, he does not need to, because his work has been done. He has insinuated the unsubstantiated figure into the minds of sympathetic journalists who, naturally enough, parroted it in last week's papers.
I hope that those who have listened to the Chief Secretary this afternoon have managed to keep up with this calculation for, when he returned to the subject today and said that I asked for details and he was therefore going to give them to me, the details which he gave—and he was not at that time in his reticent mood—did not add up to one third of the total to which he claimed the Labour party was committed.
I want to give the Chief Secretary the benefit of the doubt. Let us assume that this piece of paper does exist, and let us assume that the only reason that he did not show it to me, and was not prepared to publish it, was the ridicule which would naturally be his were it to be clear that his assumption was based on the Labour party meeting all the aspirations of its programme in its first year of existence. There is, even so, another problem that the Chief Secretary has to face. After he announced with portentous authority last Thursday that he had carefully calculated Labour's programme and it came to £24 billion, I had to point out to him that on 3 August the chairman of the Conservative party made an equally portentous annoucement that he had costed the Labour programme, and it came to £39 billion. Where did the missing £15 billion go? I will tell the Chief Secretary where it went. Both those figures are an invention intended to do one single job which now characterises all that the Government do. The Government do not like talking about their record or their policies. The Government like to distract attention from what they have done and what they have failed to do on to their scare stories about the Opposition.
Indeed, I must tell you, Mr. Deputy Speaker, that it was actually my intention to suggest that the Government would fight the next election on the slogan, "Hold on to nurse for fear of something worse". The Paymaster General actually used that phrase in an answer he gave to the Commons this afternoon. It does show the confidence the Government have in their own performance, and it shows the misunderstanding that the Government have of the British people. When I saw "nurse" on "Panorama" last Monday, it did not seem to me that many people would want to hang on to her.

Mr. MacGregor: The right hon. Gentleman seems unable to read either my reply or his own letter. He implied that, in my reply, I said that I could not give the figures. In fact, I said:
If you wish, I could go into more detail … of the way in which the figure of £24 billion, to which I referred last week, is made up, although I have to say that I was surprised by the implication in your letter that you have not done these calculations for yourself.
I then proceeded to go into detail today. I agree with the right hon. Gentleman that I have not actually given the full £24 billion — did not want to go on all day—but that will come. What he must tell us is whether the figures that I have given so far are correct.
As to the hon. Gentleman's second point, he claimed in his letter of 13 February that the then chairman of the Conservative party had said that the figures amounted to £50 billion. I am glad to notice that he changed that today because it was £39 billion, and that was based on past spending proposals and excluded such items as renationalisation and other commitments which I have not included in the £24 billion.

Mr. Hattersley: The paper is there, it is in the Treasury, the Chief Secretary has done the work and his machinery is hot from the calculations. Am I therefore to assume that he will put into the Library, or give to me, the piece of paper which adds up to £24 billion? Is he going to do that?

Mr. MacGregor: Can the right hon. Gentleman tell us whether I have been right so far on the policies?

Mr. Hattersley: If the Chief Secretary thinks that he can get away with that, he thinks that he can get away with anything.
There are, in a word, two essential truths in this issue. One is that the Chief Secretary, having made the allegation, is pathetically incapable of substantiating it. The second is that, while Conservative Members may find it convenient to invent stories about the Labour party's spending programme, we do not have to look into the crystal ball to examine the spending programme of the Government. That is a matter of record. Let me describe what that record demonstrates. The truth of the matter—

Sir William Clark: rose—

Mr. Hattersley: No, I will not give way. I suppose that I shall give way once or twice in my 40 minutes, and I suspect that it will be to the hon. Gentleman that I give way.
I want to deal now with the spending record of the Government, which is a matter not of speculation but of fact. The spending policy of the Government is to promise cuts in public expenditure, but those cuts never come. If next year's target is to be hit—and that in itself will be a unique episode in the life of this Government—the percentage of gross domestic product which goes to public expenditure will be no less than it was in the year in which the Government were elected.
What the Government do, claiming it to be cuts in public expenditure, is to transfer spending from productive and desirable projects to the financing of various catastrophes that have been created by their own policy. So we spend less in real terms on education, less on the urban programme, less on housing overall — and the Chief Secretary thinks that he is going to fool somebody by plucking one item out of the housing programme and

telling us that it has increased — less on industrial support and even less on the fire service. As I propose to demonstrate, we spend far too little on health, about which the Chief Secretary bragged, to keep up with scientific advance and demographic change. At the same time we spend much more on unemployment benefit and on interest charges.
There is at this moment a national consensus in favour of reducing unemployment by increased investment in public sector capital projects, yet the Government propose to cut capital spending by £l·6 billion, and they know that, as a direct result of that, the cost of unemployment is bound to rise.
We need to look carefully at the Government's spending record, because yesterday it was once more demonstrated that every Government statistic is likely to be massaged and manipulated to make it appear more acceptable. No wonder the polls show that 70 per cent. of the electorate believes that we do not have a trustworthy Government. On the Government's admission, public spending is 9 per cent. higher than it was in 1979. In truth, it is 12 per cent. higher, because the £4·75 billion which is to be raised by the sale of British Gas, British Telecom and other assets is, by any honest analysis, a contribution to Government revenue — not, as the Government continually pretend, a public expenditure saving.
Economically, selling assets is no different from selling gilts. In both cases, cash is raised to finance a deficit at the expense of long-term income. In the case of gilts, interest must be paid. In the case of asset sales, income is lost. Indeed, selling gilts is probably a more prudent method of financing Government expenditure if, as has been the case with the Government, the assets are sold at well below their real value.
I make my position on public expenditure levels absolutely clear. I believe that they should be increased. I am not alone in that. I quote a letter which I received yesterday which stated:
80 per cent. of respondents to the … consultation said that public expenditure on roads, railways, hospitals, housing etc should be increased in the 1986 Budget.
Moreover, nearly all were prepared to forgo cuts in personal taxation to allow for the greater spending on infrastructure.
That letter was not from a constituency Labour party or the TUC; it was from the British Institutute of Management, representing the views of British management. Its complaint against the Government is like mine — the Government attempt to cut spending year after year and fail year after year and, in the process of failing, damage the economy and undermine social services.
The Government's management of public expenditure is as incompetent as their public expenditure policy is misconceived. It is typified by a plaintive paragraph from the report by the Treasury and Civil Service Select Committee, which states:
it is not altogether clear how far the totals represent what the Government hopes will happen as opposed to what it expects the most likely outcome to be.
Too often, the Government have the wrong objective. Too often, they pursue their objectives incompetently. The combination of misjudgment and mismanagement means that desirable programmes are cut while undesirable costs, such as unemployment benefit and debt charges, are increased.

Sir William Clark: rose—

Mr. Hattersley: I think that I should give way to the hon. Gentleman in case something terrible happens.

Sir William Clark: The right hon. Gentleman did not give way when he was making the point about which I am concerned. Many of us are confused. My right hon. Friend the Chief Secretary has said that the Labour party's programme would cost £24 billion. I am not arguing about whether it is £24 billion. I should have thought that, if the Labour party put forward a proposition to increase public expenditure, we have a right to know what it will cost. If it will not cost £24 billion extra, how much will it cost?

Mr. Hattersley: I take that point and I shall respond to it exactly. I said at the time of the last Budget that I believed that there should be a net increase in spending of £5 billion. When I respond to what the Chancellor says this year, I shall make my own assessment and judgment and shall offer my figure for what the Budget spending pattern should be for the forthcoming year. The idea that I shall take advice on prudence from a Government who have consistently exceeded their spending totals, having been elected to cut spending public expenditure and having increased it year after year, is a pretty bizarre proposition, even from the hon. Member for Croydon, South. He has asked what I believe this year's spending pattern should be. I believe that it should be £5 billion higher than it is now. I shall tell him when the Budget debate begins what the amount should be in the financial year then heralded.
I shall return to the Government's policy, for it is that which we are debating. The net result of the Government's policy is an outturn which, until the Conservative party was elected, most people would have thought was impossible—a simultaneous reduction in public services and an increase in public spending. This year, according to the Chief Secretary at the press conference at which he launched his document, public expenditure is broadly flat. Yet, with public expenditure broadly flat, the Government still cut the education budget by a net £200 million; they still plan over the next two years to cut regional aid and industrial support by 31 per cent.; they still plan to cut local authority spending by 13 per cent.; and they still cut the housing programme by 18·5 per cent. this year and plan a 4 per cent. cut next year.
I want to ask the Chief Secretary specific questions about those individual programmes, most of which he prudently chose not to mention. My first point is not so much a question as a plea. I hope that we can be spared more fantasies about how the Health Service has improved. Of course, Health Service spending has increased but in many areas the service has deteriorated tragically. The Chief Secretary is right to say that, allowing for the normal correction for inflation, Health Service spending during the past six years has increased by 20 per cent. Part of that increase has been financed by patients' contributions through charges which take up 10 per cent., rather than 7 per cent., of the cost.
I agree, before the Chief Secretary tells me, that the important point is not how the money is raised but how it is spent. What the Chief Secretary did not tell us but what he must know is that two thirds of the real increase is absorbed not in improving standards in any way but, first, in meeting the needs of demographic change in an increasing population which is growing older and which, in the Health Service area, has better survival rates and,

secondly, in matching the excessive inflation costs which are not reflected in the normal regulator which determines the real increase in spending.
Consequently, the "real" increase, in the proper meaning of that word, in Health Service expenditure since the Conservative party was elected is rather less than 1 per cent. Therefore, the funds available to the Health Service are not sufficiently large to allow it to develop and to make common among all our people the new developments in medical treatment and techniques. The hard truth is that people still die because the Health Service cannot provide the necessary equipment to keep them alive. The Government's claim that enormous steps have been made confirms this and underlines and makes us all understand why only 6 per cent. of the population think that we have a caring Administration or a caring Prime Minister.

Mr. Robin Squire: Will the right hon. Gentleman give way?

Mr. Hattersley: No. [HON. MEMBERS: "Give way."] I shall follow the Chief Secretary's habit in this, if not in my statistical accuracy. I shall tell the truth about the statistics. I shall not give way any more. Hon. Members will then be able to make their contributions.
In the White Paper, the Chief Secretary does not even stipulate a local government spending target—so much for urging town halls to take responsible attitudes and so much for all the suggestions to town halls that they should undertake long-term planning to minimise their costs. How does the Financial Secretary expect councils to make any preparation for financial prudence next year and the year after when they not only do not know how rate support grant is to be distributed, but do not even have the faintest idea of the total RSG?
We know the general trend. We know what the record is. We know what future policy will be—there will be cuts and more cuts in RSG. The result will be deteriorating services and increasing rates, even in Tory-controlled council areas. Once again, the Government's incompetence will have produced the opposite result from that which they intended—to hold down RSG, with all the pains and penalties, or to keep rates down. The net result has been to push rates up.
I shall take another example from the programme about which I should like the Chief Secretary to tell us—the reduced support for industry. I ask him about only one example, although I could give many more and beg the right hon. Gentleman's comments on all of them. How can the Chief Secretary or the Financial Secretary—whoever replies — justify or defend the fact that over the next three years the export credit guarantee scheme is to be cut by 75 per cent.? Would the Financial Secretary regard that as an adequate response to the loss of the Bosphorus bridge contract, a loss which largely came about because the Japanese competition was endorsed, underwritten and supported by more Government assistance than was provided in the United Kingdom?
How does he defend the cut in the education budget? The Minister has chosen to reduce that direct investment in the country's future. I have quoted the reductions for this year. In real terms, education expenditure is to fall by £1 billion between 1983–84 and 1986–87. I fear that that is just further evidence of the contempt in which the public education system is held by the Government.
Meanwhile, I must and do gladly concede that one spending programme has increased consistently over the


past five years. That programme is the cost of unemployment. The total annual bill is now somewhere between £21 billion and £24 billion. I offer the Chief Secretary—who seems to have a penchant for this kind of calculation—an explanation of what that means in terms of taxes. The amount now spent on keeping 3·5 million men and women on the dole and the amount we lose from their being unable to pay taxes or national insurance contributions is equivalent to reducing the basic rate of income tax to 12p in the pound.
There have been two growth industries under this Government — poverty and unemployment. Yet perversely, with unemployment trebled and long-term unemployment now greater than the total number of those unemployed in 1979, the Government reject the one certain way of putting Britain back to work. Capital programmes are being cut, not expanded. Capital spending has been cut by 37 per cent. in the lifetime of the Government. Since Labour's last year in office, expenditure on housing has been cut—

Mr. Michael Forsyth: Will the right hon. Gentleman give way?

Mr. Hattersley: No. I have made it absolutely clear that I will not give way.
Since Labour's last year in office, housing expenditure has been cut by 59 per cent. and the Government plan further cuts between now and 1989.

Mr. Michael Fallon: Will the right hon. Gentleman give way?

Mr. Hattersley: I have already made it quite clear that I will not give way.
If the Chief Secretary wants to be taken seriously, he had better produce better defences for his policy than the one he wheeled out to defend the cut in the housing investment programme. The Chief Secretary said that the housing investment programme has been cut in the recognition that more and more of our people wish to live in private housing. That apology might have some weight if there had been an increase in private housebuilding but private housebuilding has also fallen. To imagine that we would be fooled by the implication that the gap in public housing would be filled by increased private building shows the triviality of the Chief Secretary's approach to these matters.
The Chief Secretary said that more and more people want to live in their own homes. I must tell him that more people want to live in a decent house of any kind and, because of the cuts in the housing investment programme, more and more people are living in slums, in multi-occupation and in housing unfit for human habitation. We could overcome that problem and at the same time reemploy some of the 400,000 construction workers now on the dole. We could reduce homelessness, overcrowding and end the misery of multi-occupation. Yet the Government's condemnation of that is evident in the White Paper. There are 4·6 million local authority houses in need of repair. The cost of repairing them would be £19 billion, yet the Government propose to spend only £2 billion a year on that. In fact, the speed of further deterioration is likely to outstrip the speed with which the present repairs are carried out. That will simply store up more and greater costs for future generations. No commercial undertaking would allow its capital to deteriorate in that way particularly since the resources—

Mr. Fallon: rose—

Mr. Hattersley: —to finance these jobs are available. The Government persist in behaving as if unemployment cost the nation nothing. However, each man and woman who is out of work costs the Exchequer between £6,300 and £7,000 a year. I repeat the question that I asked the Chief Secretary last week, the question I have asked today and the one that the Opposition will continue to ask until we can answer it ourselves when we are in government: why not spend public money on jobs rather than the dole?

Mr. Michael Forsyth: rose—

Mr. Fallon: rose—

Mr. Hattersley: I have been asking questions, yet an aphorism about organ grinders and monkeys comes to mind when I see the two hon. Gentlemen rising.
I know what the Chief Secretary's theoretical answer would be. He says that the public expenditure cuts which he aims for but never quite achieves would liberate economic energy. He believes that such cuts would make tax reductions possible. In fact, public expenditure cuts have generated unemployment and promoted other forms of public expenditure. Far from having tax cuts, we have seen the annual tax bill increase by £29 billion. I must tell Conservative Members that, after the Budget, in which no doubt tax cuts will figure, the vast and overwhelming majority of families will still be paying more in taxes than they were paying on the day that the Government were elected in 1979.
I said that I had no doubt that tax cuts will come in the Budget and I will now try to justify the feeling of optimism that I have engendered in some desperate Conservative breasts. Last week's gloom, intentionally engendered by the Prime Minister and the Chancellor of the Exchequer, was just the black propaganda phase of the Lawson cycle. We all know what the Lawson cycle is. It begins each Christmas with bragging and boasting about tax cuts. It is followed each January by a sterling crisis and record high interest rates. It then moves quickly through its next phase. First, critics question the Chancellor's judgment, the Chancellor then abuses the critics and the critics are then proved right. Finally, attempts are made to revive the Government's standing by predicting catastrophe in the hope that when it turns out to be only failure everybody thinks that everything has turned out right in the end.
That is a dishonest as well as an incompetent way of governing the finances of the country. In short, that is typical of the Government and that is why the Opposition will vote against them tonight.

Mr. Terence Higgins: Clearly this debate should be among the most important in the annual parliamentary cycle, dealing as it does with the allocation of the entire resources of the Government. It is true that the presentation of this year's White Paper, which is significantly improved, provides a better basis than ever before for the House to discuss these vital matters. I should like to express my appreciation of the way in which the Government have responded to recommendations of the Treasury Select Committee as far as the presentation of the accounts and the diagrams in the White Paper are concerned. There is obviously a problem about how much bigger the White Paper should get in terms of the amount


of detail it contains. Nonetheless, it now provides a reasonable foundation for the House to discuss these issues.
Having said that, we should recognise that this debate has never been a very satisfactory parliamentary occasion. It was rather worse when it used to be a two-day debate. It may be worth while to spend a few moments analysing why that should be. First, the fact that there is a vote at the end of the proceedings is irrelevant to any subsequent events, as was demonstrated clearly when the previous Labour Government lost the vote on the public expenditure White Paper and nothing happened in consequence. That does not greatly help one's interest in the proceedings in relation to determining an outcome.
The second reason why this occasion tends to be unsatisfactory is that it is very much a post mortem on decisions already taken in the previous public expenditure round. We ought to be able to deal with these matters more efficiently. That brings me to the third problem. There is great pressure on the House, particularly from the Opposition, to debate the White Paper soon after its publication. That has considerable disadvantages, because it means that the Treasury Select Committee is under considerable pressure to produce a report at short notice. It also means that other Select Committees, which might now usefully study the considerable amount of detail that appears in the document, do not have the opportunity to do so in time for the debate.
The next reason why it is rather unsatisfactory is that the autumn statement contains a great deal more information over a period of years than was previously the case. The emphasis has tended to move towards the debates on the autumn statement and the Budget, which means that this debate, for the reasons that I have given, tends to become a much more technical exercise. That being so, the Committee carefully studied the position and has given a clear recommendation at the beginning of its report that the timing of the debate is wrong.
The correct time, following publication of the White Paper, for those matters to be debated is May or June, when the next round of public expenditure decisions are just going to Ministers. The House can then express a view of what it believes the public expenditure priorities should be.
I hope that it will be possible to persuade both sides of the House that such a change in our parliamentary timetable would be a significant improvement. We do not have much opportunity to debate economic affairs in June or July. I hope, therefore, that the Opposition and Government Back Benchers will agree that that would improve the overall way in which the House and the Committees can monitor what the Treasury is doing.
That brings me to the priorities, which were dealt with at some length in the report to which the Chief Secretary referred. We spent a large chunk of our report questioning the machinery by which priorities are determined. That gave us considerable cause for concern. We picked out three examples of the way in which that is seen not to be working properly. Last year, for example, there was a problem over student grants. The Department of Education and Science was then told that it had to find savings elsewhere within its own budget.
We had another case with regard to overseas aid. The Foreign Office had again to find offsetting savings within

its own budget. There has clearly been a decision that the Department of the Environment should apply more money to the inner city problem—something which I am sure is correct, but it is being done at the expense of the shire counties, again because the Treasury insisted that the additional resources needed to meet unexpected expenditure must be found within the same Department.
I and the Committee do not believe that that is a sensible way of proceeding. If one is going to allocate resources in the light of some new demand upon them, priorities should be reassessed, not merely within the Department involved but across departmental boundaries.
That brings me to a point which the Chief Secretary mentioned-whether negotiations should take place, to the extent that they do, bilaterally. It is possible to reallocate priorities on that basis, because the Chief Secretary puts more pressure on one Department than another. We then have some reallocation of reserves. It does not seem that the Cabinet as a whole considers the overall picture when determining which item should be given greater priority and which less.
The whole pattern of expenditure has a tremendous momentum of its own. It can only be adjusted comparatively slightly, but, nonetheless, all the priorities should be reassessed in the course of the annual expenditure round.
There was an interesting article in the Financial Times today which claims that in future there will not be proposals for increases and additional expenditure during the course of the round. The Chief Secretary did not comment on that. I do not know whether the Financial Secretary will when he replies. The thrust of the argument in the article, if it is valid, is that the savings will be found within the Department rather than resources being allocated afresh across Departments if there is an increased claim in one area. It is only with regard to the overall picture that one should say that we should find offsetting savings if more expenditure is incurred elsewhere. To prevent a position where priorities are assessed across Departments seems to lead to a serious misallocation of resources over time.
I hope that the Chief Secretary, whom I congratulate on his new job and who will bring his personal approach to the problem, will carefully appraise the way in which the machinery is operating. I am far from sure that it would be to the Treasury's detriment if something along those lines is done.
I should pick up one point made by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). He seems to be under the impression that the Government's and the Treasury's present plans are to cut public expenditure. That was the original intention. I believe that I should be right in saying that that intention has now been modified and that the present intention is to control rather than to reduce public expenditure.
Another important point in the Chief Secretary's speech is that he continues to assert that finance—revenue if one prefers it— determines expenditure, not the other way about. The Treasury Select Committee has had considerable doubts about that. My hon. Friend the Member for Bridlington (Mr. Townend) intervened in the Chief Secretary's speech and questioned him on that point. If that is indeed the case, we must carefully consider what the effect of the oil price fall and the consequent reduction


in available resources is. Clearly, it alters—if what the Government say is true—the amount of money we have available to spend.
In response to the intervention, the Chief Secretary said that it would all be sorted out in the Budget. I suspect that the logic of that is a little shaky, to say the least. Either finance determines expenditure, in which case the way in which it is raised is irrelevant because it is a constant, or we must adjust for changes in the economic environment. I believe that that is a false argument, because I do not believe that in government finance determines expenditure. The reality is that the expenditure pattern is fixed and the revenue is then produced to finance it. I am puzzled about why the Government should have got themselves into that argument.
Some other important points arise from the White Paper which I should like to mention briefly. I am worried about one aspect of the presentation. A summary of the main points at the beginning of volume I of the White Paper points out where expenditure has increased. It should perhaps also include some reference to where it has been reduced.
The reserves are of considerable interest. Our report deals with them in paragraph 30. We found more and more in the course of questioning that, whenever there was an unanswered question, the answer was that it would all be found in the reserves. The Chief Secretary did not explain why apparently the uncertainty is becoming greater and greater and so bigger and bigger reserves are needed.
That tends to undermine the White Paper's purpose, which is supposed to be to show where the resources are likely to be allocated. We must have some reserves, but it is far from clear why they have to become bigger and bigger, except that we find that local authority expenditure is based on a straightforward assumption without any genuine attempt to appraise likely expenditure over the planned period.
In those two respects — the reserves and local authority aspects of the White Paper—the House is being given less information than it was before.
I do not wish to go into the subject of privatisation and how the proceeds should be treated. The Committee has dealt with that issue at considerable length on a number of occasions. I merely wish to point out that the right hon. Member for Sparkbrook changed his ground halfway through. We can consider the proceeds as reductions in public expenditure, as revenue or as a means of funding the public sector borrowing requirement. He said that they should be treated as revenue but then went on to argue that they should be a means of financing the PSBR. The final view—that they are a means of financing the PSBR—is correct.
I want to deal with the matter of infrastructure and tax cuts. I think that the argument is becoming absurdly black and white. It is a matter not of whether we have one or the other but what priority we give to them, whether a particular tax cut is more beneficial in relation to unemployment as against a particular item of public expenditure. One has to assess the priorities, but the issue has now become very black and white. The Opposition say more should be spent on infrastructure and Conservative Members are accused of wanting only tax cuts. We have to have a balance. In fact, that is what we have— a considerable amount is being spent on infrastructure and at the same time there is a tax policy related to that.
The final paragraph of the Committee's report gives cause for concern. It shows what is happening on capital expenditure or net capital formation in the public sector. We give a table for public expenditure on total fixed capital formation excluding defence which shows a worrying trend, if one looks at it in terms of index numbers, which is perhaps the easiest way of doing it.
Many hon. Members wish to speak and I do not want to detain the House for much longer. Traditionally, this debate has ranged very widely over the whole subject of economic policy and I have to say that the White Paper is based on an underlying assessment about the economy and economic forecasts. I think that we would be foolish to suppose that the current economic position is other than perilous. The Chancellor of the Exchequer has been successful in hitting the right balance between interest rates and exchange rates. It was a close-run thing at the beginning of the year, but ultimately it has not worked out too badly.
However, the position in the United States still gives very grave cause for concern. Today we heard various statements by the chairman of the Federal Reserve, Mr. Paul Volcker, which appeared to be in conflict with some of the remarks made by the Treasury Secretary, Mr. Baker. The American budget deficit gives grave cause for concern. It has not been significantly reduced and it still imperils the world economy and there is the risk of a so-called hard landing in which the dollar collapses. We would then find high interest rates and a world recession. That development could seriously jeopardise the plans in the White Paper. Therefore, I believe that the Chancellor should do everything possible to resolve that.
The so-called Group of Five solution, which in the end turned out to be a group of two—Japan and the United States of America—has been successful in producing a considerable decline in the value of the dollar. That has been done on the basis of intervention and on threats on intervention, and the underlying position still remains very dangerous. I think that the Chancellor should consider that in his negotiations with the Group of Five.
Unless we deal with that problem, and it cannot continue indefinitely unresolved, the basis of the figures in the White Paper, complex and detailed as they are, is in jeopardy. Nonetheless, I think we should be grateful for the way in which the Government have responded to the Committee's report, certainly the improvement in presentation. I believe that we are in a much better position to debate the issues now than previously, but I hope that in future this debate will take place in June rather than at this time of the year.

Mr. Robert Sheldon: It is always a pleasure to follow the right hon. Member for Worthing (Mr. Higgins) because it gives me the annual opportunity to congratulate him and the Treasury and Civil Service Committee on providing what is becoming ever more important to our debates—its own report upon the Government's expenditure plans. I was particularly pleased to see the serious, full and thorough way in which the Chief Secretary to the Treasury dealt with it. We are all grateful to him for attaching the importance to the report which I always thought it had.
I heard the comments of the right hon. Member for Worthing about the timing of the debate. I am not sure that the timing will make much difference. He will know my


annual plea for all the Select Committees to involve themselves in the total expenditures in the areas in which they have interests and he will know their flat denial and lack of interest year after year. I am not sure that changing the date will do very much.
I was particularly interested in the comments on priority. That is an important aspect of the White Paper and it deals with it in a way that no other White Paper has. It obviously largely stems from the valuable memorandum by Mr. Christopher Johnson, who is the specialist adviser to the Committee. Paragraphs 13 to 23, a large part of the report, deal with the determination of priorities. It is not an easy subject but I am grateful that the Committee has tackled it.
Paragraph 23 deals with one aspect of priority. It is talking about the programmes which are increased:
The principal increased allocations in the current year's White Paper are … 'employment and training measures, the health service, capital spending on roads … renovation of local authority housing … higher costs of existing policies on social security, agricultural support and export credit.'
The Chief Secretary made a great deal of many of those matters but he did not say anything about the fact that paragraph 23 points out that there is no comment on the reductions.
The Chief Secretary told us about the increases but we have to read the report from the Committee to learn about the reductions. The Committee concluded that an analysis of this kind, together with an explanation of the underlying policy and other considerations, ought to be produced. The report goes on, in the work of its specialist adviser, to deal with those reductions. It deals with the spending cuts which are not mentioned, in defence, foreign and Commonwealth affairs, the European Community — I have objection to cuts there — agriculture, interest support, trade and industry, energy and so on. In page after page we see those cuts spelt out, and they are the mirror image of the expenditure increases that the Chief Secretary mentioned. It is becoming more fashionable to talk about expenditure than cuts.
In questioning the Treasury and the Chief Secretary the Committee dealt with priorities in certain programmes. In particular, my hon. Friend the Member for Great Grimsby (Mr. Mitchell) dealt with the priorities in housing, education, urban programme, prison accommodation, social security and so on. He talked about which of those should have priority and where the priorities lay. That was splendid, but we have to ask why we had to wait for the Committee and my hon. Friend to mention the priorities when we have departmental Select Committees. If they are not interested in seeing money allocated to the areas in which they have a special interest, why should it fall to the Treasury and Civil Service Committee?
We are grateful to the Committee for showing what can be done and how we can bring those matters into the light of day. We can ask the departmental Select Committees only to look at their areas of interest and see whether they will be satisfied with the expenditure of £130 billion and how it affects them. I should have thought that few things were more important or interesting than how much money will be received and where it will be spent. That should interest the departmental Select Committees, and I hope that they will be prompted in that way.
We have seen one example, which I know something about because it was the subject of the Public Accounts

Committee report—the way the urban programme was underspent year after year. Little can be more important than spending on our urban problems. The urban programme was underspent in its first year—it is not easy to get these things right—it was underspent in its second year, and the problem grew worse, and it was underspent in its third year when the problem had become even worse. Both the departmental Select Committees and the Treasury should take that lack of control into consideration.
Paragraph 20 of the report deals with savings within Departments rather than from other Departments:
it seems clear that additional grant for the Inner Cities is to be accommodated by offsetting reductions in rate support grant for the Shire Counties. There was no reappraisal of where savings should be found from other departments.
That is the easiest way for the Chief Secretary to conduct his bilaterals. It is easier to allocate a sum to a Department and ask the Department for its priorities than to bring the matter before the Star Chamber or the Cabinet, and reappraise the amounts that will be obtained from different Departments.
Although I appreciate the point made by the right hon. Member for Worthing, there are difficulties and problems. It is only right that we are aware of them, and we must continue to press for sensible allocations. I hope that the anxiety and interest of the departmental Select Committees will back us up in that. I hope that the time is not too far distant when the Benches will be filled with members of departmental Select Committees, complaining about the lack of expenditure in their particular area. I am glad to see one Select Committee Chairman present, my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short). I only wish that she had come prepared to show her anger and frustration at the lack of expenditure on matters which worry her deeply, and that more Select Committee members were present.
I share the scepticism of the right hon. Member for Worthing at the statement year after year that revenue determines expenditure. I doubt whether that is true. If it were true, the collapse in oil prices would certainly determine expenditure. The Chancellor of the Exchequer said:
The overall effects of falling oil prices on output and inflation are expected to be broadly neutral — if anything, slightly beneficial."—[0ffical Report, 13 February 1986; Vol. 91, c. 1084.]
I am not sure whether all hon. Members were convinced by that statement. If anybody can believe that cheap oil benefits us, as an oil producer and exporter, it illustrates only our failure to use oil profitably on behalf of the whole country. Why should the effect of falling oil prices be neutral? It can be neutral only because we have done nothing with the revenue from oil.
I am not a theorist, but I always think of the potato farmer. He has one simple objective—a high price for potatoes. He produces and sells potatoes, and we produce and sell oil. Just as we benefit from world expansion which has resulted from cheaper oil prices, so the potato farmer benefits from the increased prosperity of his customers. Nevertheless, a high price is important. We have an asset which is in great demand, and it should have made us prosperous. It requires extremely able Ministers to use this heaven-sent blessing to impoverish so many British people.

Mr. David Howell: When the right hon. Gentleman says that we have done nothing with oil


revenues, does he define as nothing investing more than £70 billion overseas and producing an annual income of £8·2 billion each year to the United Kingdom?

Mr. Sheldon: I do not think that it is an advantage to be a rentier or a remittance man for the world in future, and to deny our manufacturing industry what it should have. But the position is even worse than that because sometimes remittance men do not stay in the United Kingdom. Even newspaper proprietors who tell us how we should operate, behave and conduct our affairs live and pay their taxes overseas. Therefore, there is no particular connection between sending all our money overseas and getting it hack. Moreover, we lose through industrial decay and decline.
We should have had a policy for oil depletion. Then, when the amount of oil was restricted, we could have discussed it, at least with Norway, and possibly with other countries. The other European countries will be the great beneficiaries of reduced oil prices—much more than we can be. We should have considered the oil question, not with the lumber of dogma, but with a clear understanding of where our interests lay. Obviously, if oil prices fall, there will be advantages in lower inflation, but we could have used higher oil prices to reduce oil taxes, such as the hydrocarbon oil duties, and so could have had cheaper oil for our industries and for other purposes. Our failure to use oil revenues is caused by our failure to understand how they can best be used. Our supreme task is to ensure the prosperity of our people, and oil revenues should have been directed to that aim.
We depend on our manufacturing industry, and we can foresee a considerable reduction in industrial assistance. Regional and general industrial support will plunge from £888 million in 1982–83 to £320 million in 1988–89. We are becoming more dependent on our manufacturing industry, and, after almost contemptuous references to it, we are now hearing new and even kind words of encouragement to it. The trouble is that much of that newfound concern is coming too late. More than one third of the firms in my constituency closed during the first two years of the Government's passion and zeal—one third in the number of firms, and about one third in the number of jobs. That was the direct and immediate consequence of the 17 per cent. interest rate, coupled with the exchange rate of $2·40 to the pound.
The Government are supposed to encourage small firms. Such firms do not have great resources. They could not export at that exchange rate, or stay afloat with those interest rates. They were trapped. They closed their doors and dismissed their workers, whose skills were lost. Those firms included medium-tech companies, highly skilled in engineering, which all countries, whether Japan, Germany or the United States, find of value to their economies. At last, the Government are beginning to understand that they need such firms, and to speak warm, encouraging words to them. But it is four years after the funeral for many such companies.
It is difficult, but not impossible, to help industry, and the easiest thing in the world to damage it and drive it out of business. That is what has happened. The bankruptcy figures and liquidation statistics do not attempt to convey the misery and wretchedness of the owners, the hopelessness of the managers in their middle years, and the unemployment of the workers, whose training, acquired so laboriously, is no longer needed.
Money will be spent on some firms that will get into difficulties. Earlier this week the Financial Times leader, which was about what may happen after the big bang in the City, and how public expenditure should not be used for some purposes for which claims are likely to be made, stated:
The Government should make it plain that banks and other financial institutions that get into trouble … will be treated with exactly as much sympathy as an uncompetitive West Bromwich metal basher, the special pleading of the Bank of England notwithstanding".
The Government have their favourites, including the financial institutions that are just down the road from the House, but the manufacturing industries are far away.
There are political pressures; the Treasury and Civil Service Select Committee refers to those political pressures for expenditure. The military bands were mentioned in the Public Accounts Committee. I have nothing against political pressures, but I like to know when they are being applied. We had the humiliation of the permanent secretary speaking about social need and not the political requirements.
I see that the right hon. and learned Member for Dover (Mr. Rees) is present. I have nothing against the right hon. and learned Gentleman. He is obviously right to fight for his constituency's interest as I will fight for mine.
When there are political considerations, it is only right that they should be justified on the grounds of financial common sense and good housekeeping or that the claim is made openly that they are different matters and discussion can take place on the Floor of the House.
As industrial assistance has declined, there has been a massive rise in the stock market. As the stock market rises, interest in mergers of companies increases considerably. In the rising stock markets, those who have exchanged the long view for immediate profits discover that their share prices are sharply improved, which could be a base for a takeover that makes no industrial sense and about which any Government should be concerned.
The Government seem to be saying that we should forget industrial logic and concentrate on competition. They are rightly in favour of competition, but that is not enough. The trouble about limiting takeovers to mergers that do not reduce competition is that the growth of conglomerates is encouraged. In all our years of changing industrial policy, in which public expenditure has featured strongly, we have learned that no firm exists with such managerial wisdom and experience that it can advance and rejuvenate the industry in which it operates. At a time of a booming stock market it is wise to call a halt to takeovers and mergers and calm down frantic companies by introducing a long period of delay and reflection.
A major aspect of public expenditure and the implications for public expenditure will come from the sale of gas during the next 12 months. We know that the political dogma of denationalisation has changed to the claim that tax cuts are valuable. We have seen a change from dogma to straightforward tax cuts. Public monopolies are being converted into private monopolies. We have seen the selling off of capital assets, which has been called selling off the silver, and we have experienced the difficulties of regulating such monopolies. However, the House has a right to be concerned about the price that we receive for selling off public assets.
Perhaps the Financial Secretary to the Treasury does what I used to do and makes a trip to the City to see the


Government broker. Why do we see the Government broker? The sales of Government gilt-edged stock over the years have amounted to between £4 billion and £10 billion. He makes the visit to ensure that we are selling Government stock at the highest possible price. The margins are extraordinarily fine. We discuss one eighth of one per cent. as a major issue, but it is not as major as £5,000 million.
When we began to sell off Government assets held on the people's behalf at £50 million or £100 million it was not so important. But it is now reaching the level of the sale of Government stock—between £4 billion and £10 billion—and the Government's sale is in the middle of that range. The way in which we devised, with care and consideration, the method to ensure the best possible price must now be matched by the Government to ensure that we get the same best price from the assets that are to be sold.
There is no need for a forced sale. We sell assets like oranges on a Saturday night in Ashton market. At some times of the year we can get a cheap box because they are going off, but our assets are not going off. The Government should take their time and sell them bit by bit as the Government broker does. We should learn from the Government broker. He studies the market, decides how much can be sold and releases them according to the desires and requirements of the market. He disposes of them at the best possible price. If he gets one issue wrong, he has time to correct it on the next and so he learns. We sell our assets at one go. Who makes the money? Who advises the underwriters on the price? The same underwriters that are buying them. The merchant banks are the people who advise and buy. There are also those people overseas who buy and immediately cash in the assets in the City, so we just hand them a nice present.
If those assets held on behalf of our nation are to be sold, we must ensure that they are sold at the best possible price. I urge the Chief Secretary to the Treasury to set in hand a proper review of the way in which our assets are sold in the future.

Mr. Nicholas Soames: If the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) will forgive me, I shall not follow his extensive and, I am sure, important arguments, because this is the first time that I have dared to step into this arid atmosphere, this dead sea of parliamentary debate. As the right hon. Member said, I come along with a piece of special pleading for one area that is mentioned in the White Paper—Government spending on the science budget.
I applaud the Government's continued resolve, as expressed in the White Paper, to keep total spending under firm control. I accept that the Government must have priorities. It is intended that provision for employment, for example, is to rise substantially in the period that we are debating tonight. In many areas there have been substantial increases and further increases are forecast. I applaud the Government's resolve to obtain value for money, which is vital in any endeavour, whether in the private or public sector. The Government's initiatives have had a most salutary effect.
Obviously there is constant pressure on the Government. I see my right hon. Friend the Chief

Secretary nodding his head, knowing that a piece of heavy special pleading is coming. The Government have in their wisdom set aside extra money for the science budget and I congratulate them on it. However, it is a woefully inadequate figure if one considers the challenges that face British science and technology in the highly advanced and competitive world in which we live. I appreciate the Government's view that within the resources available their aim is to maintain and enhance the strength and quality of the British science base. This year the Government are adding £15 million to the amount originally stated in the White Paper. That is a welcome and valuable increase, but it is not enough to cope with the real problems with which we must deal.
In reply to my right hon. Friend the Secretary of State for Education and Science, the Advisory Board for the Research Councils' report in June stated:
Over the last five years the Government has reduced the level of investment … (in scientists and their research) … in real terms —against the trend in other developed countries. The economic and social effects on the UK of this may not become obvious for a few more years. However, we should warn the Government that when they do they are likely to be grave and effectively irreversible.
Of course the hardest decisions of all on public spending are those where there is so much that is right on each side of the argument and where there are so many competing considerations, but it has always seemed to me that common sense is the only real solution to the country's problems. Common sense dictates that we must make a further substantial increase in the amount of money that we put into the science budget. In scientific and technological terms, where we are behind we must catch up, and where we are in the lead we must continue to hold on to a very tenuous lead. That is the task that befalls the scientific and technological community in this country, but it cannot do it without a substantial Government commitment in terms of both aid and money.
Industry has accepted the priorities that this Government have consistently made plain: the control of inflation, the need to improve competitiveness and the need to increase incentives. I know that they understand that this strategy is a solid foundation for jobs and prosperity, but there is a further and most important foundation to the jobs of the future,: and it is in the harnessing of the opportunities that science and technology increasingly are opening to us and to use them for the creation of jobs.
Never before have there been such luscious scientific fruits for us to pick, to the enormous benefit of all. However, in quality, design and innovation, British companies have until recently lagged seriously behind their international competitors. It is in the area of innovation that we have to do a great deal more, otherwise our situation will not improve. Companies will continue— as my right hon. Friend the Chief Secretary to the Treasury said a few days ago in a debate on the economy— after searching all other markets, to choose foreign capital goods for their investments so as to remain competitive.
The Government make regular and wise incantations about their desire to have a lively, dynamic manufacturing industry. The position is much improved, but we shall not improve our industrial and manufacturing base unless more of our most brilliant people are science-based and


unless more scientists have assistance from the state to develop and explore the opportunities that they know exist but that they are unable to exploit for lack of resources.
If we are to take a bigger share of existing markets, we shall have to challenge the Germans and the Japanese. In order to have a hope of taking them on, we must be able to put a very great deal more into industrial research and at least reach the levels of investment that they make. Putting money into scientific research is one of the finest long-term investments that can be made to cure unemployment. There is a very real role for the Government to play in helping to seek out opportunities and give a lead by showing industry that they are serious about funding a major science budget to assist industry.
I fear that unless we tackle this problem we shall begin to lose out in the highly competitive scientific and technological drive that is fuelling and will continue to fuel the prosperity of other more successful nations. For my part, I see little distinction in a nation that professes to wish to compete in the international, commercial and industrial markets of the world but which is so miserly with its science budget that effectively it cuts off its nose to spite its face. We have the opportunity to create, as partners with industry, the kind of heady atmosphere that senses and feels the possibilities, the opportunities and the vastly increased potential of high-tech world-wide markets.
A critical factor in achieving such confidence is the working together of Government, scientists and industry. However, the Government are making a severe miscalculation. They appear to believe that national strength in basic research is not essential for economic success. However, it is now clearer than the light of common day that all of the new industries are based on technologies that are dependent upon pure science —hence the substantially increased investment in basic research by the Japanese, French and American Governments. The Government's policy is to encourage scientists and technologists of high quality and to underpin such excellence by raising the technological literacy of the nation as a whole. That is a very welcome and splendid aim.
Between 1979 and 1983 the number of students on science and engineering courses rose dramatically. This is an important success. The Government are to be congratulated upon steering people in this direction, but it remains a fact that, because of the adverse climate for science and research, the brain drain is materially affecting our prospects. Why is it that some of our most brilliant and gifted scientists end up by going abroad? I understand from the survey conducted by the Advisory Board for the Research Councils that it feels that more opportunities exist overseas at a time when the chances of research appointments in our universities are very restricted.
Apparently, there are more handsome facilities overseas, in terms of both grant and equipment. Furthermore, there is a deep and increasing frustration with the difficulty of getting research grants in the United Kingdom. There is aggressive recruiting by industry and universities in the United States. There is also, sadly, greater receptiveness abroad to some of our more novel ideas. I find this deeply depressing. It is not just worrying that we are losing a great deal of our young talent; there is also an exodus of some of our older scientists. I

understand that some senior scientists have been persuaded to stay in Britain only by the receipt of major equipment grants under the three-year £18 million windfall scheme.

Mr. Dalyell: The hon, Gentleman is making a very important speech, but does he agree that some of the responsibility for this must be laid at the door of the "Minister for Science"? The Prime Minister told Parliament that she is the Minister for Science. Would it not be better for the Prime Minister either to devolve this responsibility to somebody who has more time or to take the job more seriously?

Mr. Soames: I am not here to apportion blame, nor is that the point of what I am saying. I agree with the hon. Gentleman that there should be a Ministry for Research and Technology, with a Minister of Cabinet rank in charge of it.
All of this spells a problem for Her Majesty's Government. It is up to them to set the climate for scientific research in this country, as it is set in all the other countries throughout the world with which we compete. Research is far more valued and far better viewed in those countries than it appears to be here.
I draw to the attention of the House the policies in France and Germany. In its policy statement on research the Federal Republic of Germany says:
Basic research is the expression and support of the culture of an industrial state, as well as being the foundation of applied research on which the future depends.
The French go a good deal further than that. A report of the French Ministry of Research and Development says:
First and foremost it is a question of putting France among the leading ranks of the great technological powers. To guarantee an increase of 4 per cent. per annum (in real terms) of the Government financing of civil research and development during a period of relative economic difficulty demonstrates the Government's recognition of the absolute priority given to research.
What is so particularly distressing about our own position is that this country still has its greatest and most valuable scientific resources. It still has scientists of great ingenuity and skill. They have developed in a tradition of training that our competitors acknowledge to be among the best in the world. However, the problem is that even the most brilliant researcher cannot do research on the leading frontiers of technology without adequate equipment.
If we aspire to remain a nation contributing to the advance of knowledge and a leader in the development of modern technologies, the Government must make a further financial commitment to the science programme. I urge the Government to recognise their responsibility. Our science funding policy reflects the failure to take seriously the grave need to modernise manufacturing industry quickly.
I call for three specific changes, which would greatly benefit the science budget. First, may we redirect at once a handsome proportion of public sector research and development to more commercially productive areas? A good slug should be taken away from the ever greedy hands of the Ministry of Defence. Secondly, may I ask the Chancellor to introduce generous fiscal changes to provide for smaller companies to have the benefit of tax relief on research and development? Thirdly, may I ask the Government to extend the partnership programme for innovation grants and to make it more radical and broader? Sadly in Great Britain today we are wasting excellence, a resource we have in scarce supply. I urge my right hon.


Friend to recognise that today's Nobel prizewinners were born of yesterday's handsome investment in the 30 years following the war.

Mr. Seamus Mallon: I thank you, Mr. Speaker, and hon. Members for the opportunity to make my maiden speech in a very important debate. My predecessor, Jim Nicholson, held the seat of Newry and Armagh until 23 January. It is difficult to lose elections. It is traumatic. I have lost enough to know that. But to lose an election that one has called oneself must be a shattering experience. I say that in no sense of triumph, but because I know what it is to be the loser.
I cannot let the opportunity pass—I regret that they are not here—without paying thanks to the leaders of Unionism who have given me the opportunity to make this speech and to represent the constituency of Newry and Armagh, which I am proud to do.
My record might be deemed dubious. I have been a member of a Northern Ireland legislature and a member of a Republic of Ireland legislature; now I am a member of a British legislature. That sounds impressive except for one point. The first one fell after five months and the second after 10 months; so I am keeping my election posters. I think hon. Members will understand why.
The constituency of Newry and Armagh is probably one of the most historic places in Ireland and certainly very much a microcosm of the problems and contradictions that exist in Northern Ireland. I see the Minister of State, Northern Ireland Office, who is responsible for economic affairs. I remind him that in Armagh we have the oldest fort in western Europe. Its importance is that it predates religion and Christianity. It predates Britain coming to Ireland. It even predates the Celts coming to Ireland. What are we doing there? We are quarrying in it for limestone. That focal point was the seat of the Irish kings yet with planning permission we are quarrying there for limestone. I ask the Minister of State to refer to that in his deliberations with his colleagues. Can we not preserve something from the heritage that we should all share in Northern Ireland?
Further down the road, not far from where I live, is a place called Dan Winter's cottage where the Orange Order was formed. So there we have the other element of diversity. The theme of civil and religious liberty, as expounded by the Orange Order, was first formulated there. I note each year that the concept of civil and religious liberty has not changed much since the days when the Orange Order was formed.
A few more miles down that road is the ecclesiastical centre of Ireland, not of Northern Ireland or a piece of Ireland but of the whole island. The two cathedrals of the Protestant Church and the Catholic Church look across at each other in the city of Armagh. Just as the bells tolled in the new year I saw the obscenity of two policemen being blown to smithereens. The person who killed them probably thought that he was doing it for religious or political reasons. That shows the contradictions with which we must get to grips.
The right hon. Member for Barnsley, Central (Mr. Mason) unfairly and unjustly labelled part of my constituency as bandit country. That is part of the island of Ireland, the south Armagh of the poets, of Art

McCooey, where there was culture long before it existed elsewhere. That is now occupied by the Army. I shall give a startling statistic. For every 3,000 people there is a fortified Army camp in south Armagh. Hon. Members should think about that. That is the problem we have. Hon. Members will understand when I say that it is a microcosm of the whole Northern Ireland problem.
One constant factor in that constituency, as in the whole of Northern Ireland, is the tremendous craving for one thing, peace, not as a sanctimonious word nor a platitude, but as something organic and constructive. I am attracted to one definition of peace, the definition of Spinoza, which says:
Peace is not an absence of war. It is … a state of mind, a disposition for benevolence, confidence, justice.
That is very apposite to our position as we deal with the problems that I have to cope with on a daily basis.
Only when people realise the utter obscenity of violence, whether it be paramilitary violence, military violence or institutional violence, will we be able to end the obscenity and remove it from our society. It is only through benevolence and a benevolent approach that we will begin to understand the other fellow's point of view. It is only through benevolence that we will be able to deal with the one certainty that exists in Northern Irish life. The only thing that I am sure of is that, irrespective of a decision by a British Government or an Irish Government or a joint decision by both, the Unionists and the Nationalists will still be living in the north of Ireland.
We have two stark and clear choices. We can live together in generosity and compassion or we can continue to die in bitter disharmony. I ask for the confidence that Spinoza spoke about. Underlying all the problems that face us today is a lack of confidence. I know that I am not supposed to be controversial in this speech but one of the real factors affecting the Unionist community in the north of Ireland is lack of confidence. Why? Is there a leader there who will step away from the pack, who will not threaten, and who will not say, "No, no, no," to everything? Is there a leader who will turn round to his people and say, "I will lead you towards reconciliation, peace and accommodation."?
That confidence must be created, and when it is it will bring self-respect. Unionists will not secure self-respect in this Chamber and Nationalists will not do so in the Dail. They will have self-respect jointly only when they realise that their futures are so closely intertwined that they must create their own dynamic. I ask pointedly and directly of the only representative of the Unionists in the Chamber, the right hon. Member for South Down (Mr. Powell), is there someone who will take that courageous step?
Justice was the last requisite of Spinoza's definition. Jefferson once said that if justice is sacrificed for security, both are lost. Anyone who has followed events in Northern Ireland will recognise that that is what has happened. Let us consider the Rake's Progress since 1969. The law has been bent, turned and twisted to try to solve a political problem. That is an example of the necessity to examine the issues clearly.
I cannot imagine anyone on either side of the House being happy, content or satisfied with internment without trial, emergency legislation, Diplock courts, supergrass trials, shoot-to-kill policies and a section of the security forces within which the ratio of serious crime is twice that of the general community in Northern Ireland. I refer to the Ulster Defence Regiment. The ratio of serious crime


within that section of the security forces — I repeat myself— is twice that of the ratio within the general community, and we have a violent community.
Can anyone be satisfied with that? Can anyone be happy when he sees the law twisted, bent and manipulated every day of every week? If we want peace, we must base it on justice. If we fail to do that, the result will be a spurious peace which will not last. If peace is not based on justice, it will not withstand the political battle that may come when we seek a solution to the problems.
I welcome the creation of a chance to move forward, which is the first one that we have had since 1973. The House will know that I refer to the Anglo-Irish accord. I do not see it as a solution, but it provides a framework within which we can start to work together to try to create a solution. It would be remiss of me not to express a tribute to those Conservative Members, who may be Unionists by instinct or commitment, who saw the potential of the accord. A tribute should be paid to them because of their courage. A tribute should be paid also to those on the Opposition Benches who, like myself, wanted much more fundamental changes. They had to make a concession. They had to say, "Yes, let us give this a chance and make it work." Similarly, tribute should be paid to the British and Irish Governments, who have taken a courageous step. Time will show the need for that courage.
A previous Prime Minister has had attributed to him the saying that politics is the art of the possible. That saying is true up to a point. However, much more is required if we are to solve the problems of Northern Ireland. As I see it, politics, especially in relation to the continuing problem of Northern Ireland, is the art of creating circumstances within which the seemingly impossible can become possible. If we rely on the Disraeli definition, there is a thin line between pragmatism and expediency.
We need something new. For one thing, we need strong nerves. The storm clouds are gathering. Those who should be sitting in their places in the Chamber and leading are threatening instead. They are threatening the community in my constituency and they are threatening British institutions. They are threatening the very forces within Ireland which are working towards peace. That is not leadership. Courage is needed from the Government and from the Irish Government. The accord will only be as good as what it achieves, nothing more and nothing less. It must narrow the gap between the decisions and deliberations at inter-governmental level that have an effect on people's lives and deaths.
How can the accord improve the economic situation and the life of everyone living in the north of Ireland? If it does not have that effect, I shall be the first to say that it is failing. I shall be the first to argue that it is not doing what it was geared to do. We do not have any luxuries in Newry and Armagh. We do not have the luxuries of courting ideas, people and attitudes. Instead, we are dealing with life and death. I ask that there will be the courage to proceed with an agreement which is new and which has created a framework that can make it possible to create a new future.
We have moved into a new year and we are moving into a new century, and we need something to take us on our way. Are we to move into the new century with a millstone of blood, as it were, hanging around our necks, with a millstone of division and sectarian bickering, with the daily catalogue of threats of violence and death? Or are we to create a new vision for a new century and a new Ireland

that will be created by the people of the island of Ireland, on the basis of agreement and reconciliation that will work for a unity of purpose that in itself will create the only real unity that will last within Ireland?
I make no apologies, and never do, for saying that my aim is to create Irish unity by peaceful, democratic, constitutional and political means. I shall create it, if I can, on the Floor of the House, or on the floor of whatever other forum is available to me. I wish to create that unity in such a way that will not cost one drop of blood and will not remove anyone's self-respect for him. I ask the Unionists in the north of Ireland to say for the first time, "Come and build with us. Say yes."

Mr. Peter Rees: It is a rare privilege for me to take up the remarks of the hon. Member for Newry and Armagh (Mr. Mallon), who made a maiden speech of power and eloquence on which I congratulate him. That power and eloquence is not surprising because of his experience of other legislatures. He spoke with fluency, wit, modesty and feeling. I hope that I speak for the whole House when I say that we appreciated the way in which he recalled the history of his constituency and of Northern Ireland and the manner in which he emphasised the qualities and problems of Northern Ireland.
I warmed to the tribute which he paid to his predecessor, Mr. James Nicholson, who in the brief time that he was a Member of this place established himself, I venture to think, as a likeable and charming person who championed the interests of his constituency most vigorously, especially when dealing with agriculture. I am sure that I speak for the whole House when I say that we look forward to the hon. Gentleman's future contributions, which I hope will not be limited to debates on Northern Ireland. I do not know whether I should draw too much of an inference from the fact that he has chosen a public expenditure debate for his maiden speech.
I turn now to the main subject of our debate. I congratulate my right hon. Friend the Chief Secretary on the mastery he has shown of this complex subject and the skill with which he presented his paper to the House. Volume 1 of the public expenditure White Paper is glossier and clearer than previously and volume II is more detailed than before. One appreciates the additional information given—I understand that there are something like 1,200 output measures given. That demonstrates the right emphasis which was underscored by my right hon. Friend's speech.
My right hon. Friend has—like all Chief Secretaries —a difficult menu to commend to the House. There will always be legitimate champions of special interests, such as my hon. Friend the Member for Crawley (Mr. Soames), who make their cases powerfully. Such special interests are, however, too often detached from the overall figures and it is sometimes difficult to reconcile all the competing cases made in such a debate with the premise with which one starts—the overall figure. I shall deal later with the characteristic contribution of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley).
I congratulate my right hon. Friend the Member for Worthing (Mr. Higgins) and the other right hon. and hon. Members of the Treasury and Civil Service Select Committee on the work they have done, in the relatively short space of time, in considering the issues in the White Paper. There are one or two points on which I must take


issue with them. My right hon. Friend the the Member for Worthing has suggested that the appropriate moment for this debate would be May or June. I share with him and other hon. Members the regret that this important debate should be debated in such a thin House. That is not a novel experience for those of us who have participated in these debates. However, I do not reach the same conclusions as my right hon. Friend. If the White Paper were debated in May or June it would be either too early or too late. It would be too late in the sense that the public expenditure White Paper is, and should always be, a counterpart to the Budget. I do not believe that we can have a meaningful debate on Budget measures unless we can relate them to the public expenditure White Paper. If one day of the Budget debate was specifically allocated to a first debate on the public expenditure White Paper we would have a more realistic and more helpful debate on the dimensions of the problems faced by the Chancellor and the Cheif Secretary. It would force those who argue for higher expenditure to suggest which elements of public expenditure they would like to see pruned. It would also force them to state clearly—it has not been done today —how those increases should be financed.
The Treasury and Civil Service Select Committee has made this suggestion because it believes it should make a prospective rather than a retrospective contribution to the formation of policy. I quite understand the Select Committee's ambitions in this matter. I am not certain, however, that May or June would be the appropriate moment unless the Select Committee was prepared to state unequivocally what overall figure it would commend to the House. I am not confident that a contribution from other Select Committees—signally lacking this year and in previous years, though I understand the difficulties—would be helpful unless they were prepared, in the aggregate, to limit their claims to the overall figure that the Treasury and Civil Service Select Committee was prepared to commend to the House. I believe that is a far more difficult exercise than my right hon. Friend would care to admit.
It would perhaps force out into the open—one of the difficulties or the weaknesses that underly the Select Committee system when transplanted to the Westminster scene — the party differences that cannot be entirely submerged in the debates in Select Committees. The Select Committee has considered how priorities should be determined. The Select Committee has encouraged the Cabinet to take an overall view and has suggested that the current procedures and methods are inadequate. I am not confident that, at the end of the day, it would be possible to devise some formal machinery that would meet this charge—a charge also made last year in the report of the Select Committee.
My experience is that the priorities of a Government are broadly known to their members. This knowledge colours the debate in Cabinet on the overall figure and the first attempts at allocation between the various Departments. It colours the debates of the Star Chamber — if this useful piece of machinery does become a permanent feature of the Government scene. It colours the various Cabinet debates. In the autumn, the Cabinet has more than one opportunity to consider public expenditure priorities and the totals. It is always possible for a Cabinet to detach itself from the immediate preoccupations and the details

of the public expenditure to determine its priorities at some earlier or later period in the year. Such debates tend, however, to be unclear and not over-helpful and can assume real importance only if they are related to actual figures. The only Cabinet that has faced up to the difficulties of determining these questions is the Japanese Cabinet. I understand that that Cabinet goes into permanent session for two or three days. It may reach more satisfactory conclusions, though I shall leave that to those who have a more detailed knowledge of Japanese public expenditure.
The Opposition will recall that No. 10 played a powerful role in broking between the various interests of the last Labour Government, especially when it was necessary to respond to the pressure of the International Monetary Fund. Whether that is the type of intervention and type of machinery that we would wish to see as a permanent feature in the Governmental scene, I leave to others to determine.

Mr. Higgins: I am sure my right hon. and learned Friend will recall from his own experience of international negotiations that it is often possible to say something in English which will take three times as long to say in Japanese.

Mr. Rees: That is a perceptive comment on a different governmental process. I am not certain of the nuances of either the Japanese Government or the Japanese language.
I congratulate my right hon. Friend the Chief Secretary on facing so well the difficulties which, indeed, face all Chief Secretaries. There are now many areas of public expenditure that are not under the control of the Treasury. There are the public expenditure programmes which are demand-led, especially the social security programme and the common agricultural policy programme. We could develop a very interesting debate on how they should be regulated. There is a constant pressure from this Government, as I am sure there was from the last Labour Government, to moderate the demands of the common agricultural policy. The question of the social security programme would probably not command quite the same measure of common agreement across the House. However, the Department responsible for the administration of that programme must bear in mind some overall public expenditure constraint. It cannot be right that a system should be devised that is not subject to any kind of control mid-year, although I am fully aware of the practical difficulties that that would occasion.
Again, other programmes are secured by pledges—I do not necessarily mean partisan pledges given in the heat of election. I have in mind, for example, the programme of the Ministry of Defence for last year, which was subject to the NATO commitment, to which even the previous Labour Administration paid lip service. There are other programmes that will inevitably be partially outside the control of central Government, such as those of local authorities. When all this is added up, the room for manoeuvre of the Chief Secretary is seriously circumscribed, and when there is pressure to reduce public expenditure it falls on a diminished number of ministerial programmes.
The Select Committee criticised the fact that lump sums are allocated by the Treasury to the various Departments, and then it is left to the Department to determine how the lump sums are apportioned between various objectives.


This does not accord with my recollection of the process. The omnipotence that is sometimes, with a certain levity, attributed to the Treasury is not borne out by my experience of this Administration, although my right hon. Friends the Chief Secretary and the Financial Secretary will correct me if the atmosphere has altered a little over the autumnal months. Nor do I believe that that was true of the last Labour Administration.
I do not wish to show any disloyalty for a great Department of State, for which I have great affection and respect, when I say that it is not healthy that the Treasury should he drawn too regularly and in too much detail into the minutiae of departmental spending. It must be concerned where a particular project is of enormous size, or has political implications, perhaps going beyond departmental boundaries, where a decision may carry a continuing liability that may be hard to confine within the figures determined for subsequent years. Therefore, the Select Committee's criticism is not valid.
There are some attractive aspects of the public expenditure White Paper. I commend the emphasis that my right hon. Friend the Chief Secretary places on efficiency and value for money in his speech. I am delighted that in practically every departmental contribution there is a reference to those objectives. I am also delighted, and rather touched, to find that for two years in succession the Office of Arts and Libraries has recognised, even in its special sector, that there is and should be a public concern with value for money.
All too often in the cruder debates that we have on the economy, and on other subjects, the test of the Government's motives, objectives and sincerity is the amount of cash that they have allocated to particular sectors of governmental activity. This is a rather indifferent test. It is as important to determine the skill and prudence with which those sums will be expended. In every large organisation, in both the public and the private sector, this should be so. I recognise that zero budgeting on an annual basis will be virtually impossible in Government, in view of the statutory responsibilities that Government have to discharge.
I turn to the question of departmental costs. A head count was necessary and the proper approach in 1979 and the years that followed thereafter, but a more sensitive method of control is now right and possible. That is why I fully support my right hon. Friend in the adoption of the running costs approach. This should continue to yield a rich dividend.
The Government, at least since 1983, have set as their objective that public expenditure should remain broadly stable in real terms. The right hon. Member for Sparkbrook, with whom I have often the pleasure of debating on the subject, became a little carried away with his own rhetoric. The Government will have to balance the legitimate increases in some departmental budgets, but, since 1983, they have not set their targets on cutting the overall figure for public expenditure.
I commend the heroic measures undertaken at the behest of the IMF in the Administration of which the right hon. Member for Sparkbrook was so distinguished an ornament. He is fully entitled to hold that up as an object lesson to my right hon. Friend of what can be achieved, but it was achieved in rather special circumstances against a rather special background that is unlikely to be

reproduced in the lifetime of this Government. The right hon. Gentleman made much of the point that perhaps the target has not been hit every year.

Mr. Hattersley: Any year.

Mr. Rees: That depends. I readily concede that there has not been mathematical accuracy in these matters. if the right hon. Gentleman is fair to my right hon. Friend and the Administration, he will admit that the divergence has not been great, except when there have been special circumstances, such as the miners' strike.
Here I come to the rather unusual and extraordinary criticism of the amount of the reserve, no longer called the contingency reserve. I should have thought that it would be a hallmark of prudence and excellent housekeeping that my right hon. Friend followed the practice of last year, although curiously it did not occasion too much comment when the reserve was increased by design in last year's Budget. By that stage, it was possible to calculate with a little more certainty the cost occasioned by the miners' strike.
I feel no shame that the increase in the reserve has been considerable. My right hon. Friend the Chief Secretary is right to have and maintain a reserve of this dimension. It is right that the further out that one looks, the greater the reserve should be, because the contingencies and uncertainties are greater. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) made the surprisingly cheap point that this demonstrates that public expenditure is not under control. He is making a bad point, because no Government can be totally in control of the course of events. However, they can make a prudent provision against those events. It would be wrong, and a misuse of the reserve, if it were allocated in greater detail to various departmental heads before the start of the year. Of its very nature, the reserve is to meet contingencies and events that cannot reasonably be foreseen and quantified.
I realise that the Government's overall objective is an aspiration that is not necessarily achieved, although I am sure that my right hon. Friends have the good wishes at least of Conservative Members in hoping that it will. It may not sound a heroic objective to keep public expenditure broadly stable in real terms, and it may at times perhaps be a little overcharged to say that it calls for heroic virtues, but it requires a certain dogged persistence and fidelity to the main objective. I am sure that those qualities will be commended, at least by Conservative Members. What has been set for the next three years and what we attempted to achieve over the past three years is and was a firm financial framework within which both public and private sectors can order their affairs. That kind of prudent housekeeping is the firmest possible evidence of the good government that has characterised this Administration.
In conclusion, because it does not require more than a casual but I hope not too dismissive glance, I should like to turn to the speech of the right hon. Member for Sparkbrook. It was full of his customary vivacity, not to mention bombast, and full of indignation that does not sit all that easily with his naturally genial character.
The right hon. Gentleman advanced a rather curious proposition. When challenged and pressed he said he advocated an increase in public expenditure—I assume for next year, but it may be for every year or the triennium —of £5 billion. If he looks at the public expenditure


White Paper that includes those three years he will see that there were privatisation proceeds of £4·7 billion. That was criticised by the right hon. Gentleman. Unless he has become a convert to the virtues of privatisation, it means that if he were to halt the process of privatisation he would, in effect, be advocating a net increase in public expenditure of £300 million a year.
I suspect that will strike a rather sombre note with his colleagues. But they and I suspect the House and the world outside do not pay much attention to the right hon. Gentleman's figures. They are more concerned with the tone of his contributions and interventions. He may have been misreported and if that is the case I will give way and apologise to him. In one of his last challenging contributions outside the House the right hon. Gentleman coined the slogan "Cash in on Labour". For a person with experience of government, such a slogan is highly irresponsible because it must give rise to expectations that cannot be met, at least with the kind of resources that any responsible Chancellor will be able to command.
I say diffidently to the right hon. Gentleman that if he ever goes to that desert island where he was so charmingly ensconced a short time ago, he should take with him a framed photograph of Philip Snowden or, if that raises too many sad memories, a framed photograph of Monsieur Jacques Delors, because one of the iron laws of politics, at least in western Europe, is that when the parties of the Left come to power after a long period in opposition they overspend in a quite reckless way for the first two or three or sometimes four years of their Administration. Then they might live to rue the day.
Under a system of elective democracy such as we enjoy there will always be pressure for higher spending, perhaps on laudable objectives, than the resources at the command of any Chancellor will allow. If the Opposition are foolish enough to divide the House, that will only serve to demonstrate once again how weak, how ill-thought-out and how fundamentaly dishonest is their approach to one of the central and continuing problems of government.

Mr. Ian Wrigglesworth: It is my pleasure to begin by agreeing with the right hon. and learned Member for Dover (Mr. Rees) in his congratulations to the new hon. Member for Newry and Armagh (Mr. Mallon) who made a vivid, clear and memorable maiden speech. The whole House will welcome the clear dedication to peace and harmony that he expressed. We look forward to many more contributions of that sort from the hon. Member.
I cannot agree with much of the rest of the speech by the right hon. and learned Gentleman. In his final swipe at the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), he employed a little bit of cheek by criticising the first two years of Administrations. I say that because the first two years of this Administration are still regretted by a vast army of unemployed, people who are out of work because of the catastrophic economic policies pursued during the early years of this Government. Those policies led to a high exchange rate and crippled the manufacturing industries of the midlands and of many other parts of the country in such a way that they have still not recovered.
I had hoped that the right hon. and learned Gentleman might have learnt that the commitment entered into in opposition and the rhetoric of Opposition party conferences are often bad guides to the policies of a Government in their early years. If he looks at the early years of Governments over the past couple of decades he will see how true that is.
In commenting on the White Paper, I want to refer to the subject that formed the major part of the two opening speeches — the aggregate level of public expenditure. The right hon. and learned Gentleman referred to that when he talked about the debate on infrastructure versus tax cuts.
There is an absurd black and white view of public expenditure that does nobody in the House or in the country any good. On the Government side of the House there is a general philosophy that all public expenditure is bad. Hon. Members on the Labour Benches hold an equally absurd view, caricatured in many of the speeches from those Benches and from the Benches in another place, that all public expenditure is good. When talking about the aggregate level of public expenditure it does not help to have as a background those two absurd and simplistic views, because the level of public expenditure in the country cannot be determined as if there was a magic total which is the right total at any one time. The aggregate level of public expenditure needs to be determined by circumstances in the economy and circumstances internationally.

Mr. Austin Mitchell: The point made by the hon. Member is a valid one, but surely this is the time for an increase in public expenditure because resources are so under-employed. If he looks at the figures for 1979 to 1984 he will see that those countries with the biggest increases in public expenditure over that period have also had the lowest increase in unemployment.

Mr. Wrigglesworth: I entirely agree with the hon. Gentleman. I was about to say that, at a time when unemployment is at the unacceptably high level of 3·5 million, and when so much output is being wasted because capacity is lying idle, this is the time that we should be borrowing more to invest in the economy to get the growth and wealth and output that will get people back to work. That does not mean that one would agree with high levels of public expenditure at another time.
We do not know what determines the Government's view. When the Government came to office, in their criticisms of public expenditure they relied heavily upon the argument that the size of the public sector borrowing requirement was the most important indicator in the economic tables. They advanced the view at that time that too high a PSBR led to crowding out and to higher levels of interest rates and growth in the money supply, that that led to inflaton and that it was deeply damaging to the economy.
Most of those arguments seem to have gone by the board, although we are not sure what has replaced them. At the moment it seems that the justification for cutting the level of public spending is that it is too high a percentage of GDP. If we compare our PSBR as a percentage of GDP with that of virtually every other country in the western world we will find that it is extremely low. That is a curious combination of figures. Surely the level of public expenditure cannot be determined purely in relation to


GDP. The size of GDP must also be taken into consideration. West Germany has a substantially higher GDP than Britain, so we must expect the percentage of GDP going on public expenditure there to be rather lower.
Our clearly stated view is that public expenditure should be expanded to increase demand, to get some growth and to get unemployment down.

Mr. David Alton: Bearing in mind the importance of the debate and the massive number of unemployed people, does my hon. Friend agree that it is disgraceful that only one Labour Member, out of 209, is present in the Chamber? If the Labour party took this issue more seriously and was honestly worried about the problems of unemployment and public expenditure, more Labour Members would have taken the trouble to attend.

Mr. Wrigglesworth: My hon. Friend has referred to a feature that is common to many debates these days. When important subjects such as unemployment are being debated, the Labour party is virtually unrepresented in the House. Only one Labour Member is present, and there are no Labour Members on the Front Bench.
Our amendment outlines our major criticisms of the White Paper. The House will not be surprised to learn that we are critical of the proposed cuts and of the proposed levels of public expenditure on certain programmes which appear in the White Paper. I refer to housing, the urban programme, regional assistance, education and science, support for industrial research and innovation. We are especially critical of the 12·5 per cent. cut in capital expenditure during the period covered by the White Paper.
In each of those areas, we should give a much higher priority to public expenditure than do the Government. They are some of the key areas in which public expenditure could lay the short and long-term foundations for growth in industry, and increases in employment. If we do not lay the foundations in education, science, training and industrial research and innovation, our long-term future as a competitor with, for example, Germany, France and Italy, whose GDP per head of population has now overtaken ours, is extremely bleak.
We want increased expenditure, not the cuts that are outlined in the White Paper. We want an increase in the capital programme, especially in housing, which I know that my hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton) understands well. The White Paper proposes a substantial cut in housing expenditure, yet increased expenditure could meet a great social need in many of our urban areas. Moreover, such expenditure is labour-intensive and therefore cost-effective in getting people off the dole.

Mr. Alton: Does my hon. Friend agree that it is absurd that some 400,000 building workers are being paid unemployment benefit and social security to stay idle while there are still 500,000 homes without inside sanitation and the public housing stock is falling into disrepair? If the adage that the Prime Minister used at the general election—she is fond of them—about a stitch in time saving nine means anything, it must be nonsense to leave houses to fall into disrepair and to expect them to have a life of 1,000 years. Will they not simply become ruins?

Mr. Wrigglesworth: My hon. Friend is quite right. The Government have been told that many times, but they

take little heed. Construction workers and workers in many other sectors of industry are idle and being paid unemployment benefit when they could be working and satisfying the community's needs.
It is absurd to spend so much money on unemployment benefit, as the right hon. Member for Sparkbrook said. It is also a dreadful reflection on the Government's record that the contribution of revenues from North sea oil to the balance of payments has not provided the means of expanding the economy much more rapidly. The Government have not used those resources to provide capital investment which we would like.
The plans in the White Paper project a real fall of some £2·6 billion in total public sector capital spending. They are very depressing figures. To restore capital spending to the share that it took of general Government spending in 1980 or 1981 would require an increase of more than £2 billion. However, if one goes further back and compares the figures, the problem is shown to be even deeper. No business man or company director would be happy to set that level or trend of capital expenditure for his company.
Even if one goes back to the end of the 1960s, to the fiscally stringent years when my right hon. Friend the Member for Glasgow, 1Hillhead (Mr. Jenkins) was Chancellor of the Exchequer, public sector capital investment, net of depreciation, was 7 per cent. of GDP. Today it has fallen to under 2 per cent. That is a dramatic fall. We can drive around and see the state of public services. We can read the report of the National Economic Development Office on public buildings' need of repair and the need for new buildings. We can see clearly the effects of the decline in capital expenditure, which should be reversed. We are critical of the projections in the White Paper on capital expenditure and we hope that the Government will reverse them.

Mr. Timothy Wood: Is it not the case that a great deal of expenditure on repairs, particularly on housing repairs, could be met out of revenue, and for housing, out of rent income? One of the difficulties is that councils often choose to keep their rents down rather than to carry out the necessary repairs on a yearly basis.

Mr. Wrigglesworth: Even if that were the case, the dramatic change that has taken place in the figures—their basis has not changed over the years—must worry everybody who wants the country's capital assets to be maintained at a proper level. Any business man, any director of a company, would certainly want to see his assets maintained in that way, and that is not happening today. I hope that the Government will take that point on board, because investment in that sphere can be so productive in terms of jobs.
I and my colleagues would much prefer to see the sort of national accounts for which the Institute of Fiscal Studies and others have been pressing for many years, which distinguish between capital and current spending. As we do not have a balance sheet for the country, we cannot make a clear assessment of the level of capital expenditure and what is required. I hope that the Select Committee, which has done such excellent work, as has already been mentioned, will take this up much more vigorously than it has in the past and press the Treasury to move in that direction.
In the amendment, we have mentioned a number of other areas about which we have anxieties. One is the level


of overseas aid, which I think the whole country would like to see increased. I am very much aware of the high cost of increasing the level of overseas aid to the targets laid down by the United Nations. It would be difficult in current economic circumstances to take one great leap to the 0·7 per cent. of gross domestic product which I think all of us would like to see.
There has been a marginal increase in the level of overseas aid, and I am pleased that the Government have responded to the enormous pressure that has been brought to bear. If one considers the total overseas aid budget, which includes administration, one sees that aid has increased only marginally. We would like it to have increased substantially.
Part of our budget and spending proposals before Christmas contained such an increase in expenditure. We give a high priority to that. As the Band Aid exercise so clearly demonstrated, there is a broad spectrum of opinion in the country and a great deal of good will that wants to see more assistance given much more generously. People are prepared to put their hands in their pockets for such expenditure. They are prepared to put their hands in their pockets for an appeal by Bob Geldof and his friends, as they are if the taxman asks them to do it for that purpose. We believe that the Government would get the backing of a great deal of public opinion if they were prepared to move in that direction.
I acknowledge—this is why I made the remark about not being able to leap to United Nations targets—the difficulty of containing public expenditure. Every Government have found it difficult to do so. I do not agree with the right hon. Member for Sparkbrook, who gives the impression that magic wands can be waved. It is difficult for any Administration to control public expenditure. I do not think that the Chief Secretary will find it easy to come to the Dispatch Box and cost the alliance's programmes, and come up with the sort of absurd figures which he justifiably gave for Labour's programme of expenditure. We are keeping very close monitoring of our expenditure commitments and, I think, are being as responsible in our commitments as any Opposition could be with the resources available.
For that reason, when we published our statements of economic policy for last year, even a newspaper like the Daily Telegraph was able to refer to them as model Opposition documents. I therefore hope that the House, and indeed the country, will respond to that desire to be responsible in our proposals. However, we disagree fundamentally with the strategy which the Government outline in the White Paper. We have described in the amendment the areas which we believe should not have been cut. We also believe that it is wrong to restrain the aggregate level of public expenditure to its present level when there is such a desperate need to expand the economy and achieve greater growth so as to get people back to work.

Several Hon. Members: rose—

Mr. Deputy Speaker (Sir Paul Dean): Order. I remind the House that time is moving on fast, and many hon. Members are hoping to speak in the debate.

Mr. Timothy Wood: First, I take the opportunity to join other hon. Members in praising the maiden speech of the hon. Member for Newry and Armagh (Mr. Mallon). I thought that he spoke with great fluency and sincerity about his constituency and his desire for peace. I am sure that we shall hear many more excellent speeches from him.
I welcome the Chief Secretary's emphasis on value for money in the public sector, and the emphasis which the Government continue to place on returning items from the public to the private sector. The less that Government are involved in these businesses the better it will be for all of us, whether those in the House or people at large in the country.
The introduction of much more widespread competitive tendering is something for which we should continue to press. There is no doubt that lower costs have been achieved, and a greater incentive has been given to people to provide goods and services more effectively and efficiently than has all too often been the case in the past.
Apart from those general points, the Chief Secretary laid emphasis on priority on public spending. In this regard, I wish to express some concerns. I want to direct my comments to spending on higher education and, to a much lesser degree, on scientific research. I might have said slightly more on the subject of scientific research had not such a substantial case been put by the hon. Member for Crawley (Mr. Soames). My few remarks will be a mere shadow of his, following what he had to say. Therefore, I will pursue the matter of higher education.
Overall the percentage of public expenditure devoted to education and science is expected to fall from 14·3 per cent. to 12·1 per cent. between 1978·79 and 1988·89. I am well aware that falling school rolls have enabled savings to be made, but in higher education the position is not so straightforward. In the last few years the Government have rightly sought savings and improved effectiveness in universities, polytechnics and colleges of higher education. In universities, and to an even greater extent in polytechnics, there have been greater reductions in the number of staff to pupils and the moves in that direction thus far are welcome. In universities the figure has moved in the period 1979 to 1984 from 9·3 to 10·2 students to staff, and in polytechnics from 8·4 to 11·1. I am not convinced, however, that further savings in higher education can be sensibly undertaken.
I want to see a growing proportion of young people pursuing higher education courses. In particular, I want to see an increase in the number of students pursuing some of the more expensive science and engineering courses. I believe that the resources planned for higher education are not sufficient for the country to meet its needs in highly educated and skilled manpower.
Even in the last few years, we have seen a paradox in university education and admissions to universities. There has been success in encouraging young people to pursue courses in mathematics, science and electronic engineering. However, the hurdles to be jumped to pursue such courses at university have been raised substantially. If one examines the A-levels required to pursue such courses, one finds, as one might expect, that law and medicine are two which require high quality entrants. I am pleased at that. One also finds, rather more surprisingly, that, in the next six most difficult courses to pursue in terms of entry


qualifications, one has mathematics, physics, electrical engineering and combined biological and physical sciences. Employers have difficulties in recruiting graduates in these subjects, yet we make it difficult for young people to pursue those subjects at university. Incidentally, it is much easier to obtain the qualifications necessary to pursue university courses in history and sociology, so the Government have certainly not followed a philistine approach.
To be a more successful, competitive nation, we must maximise the potential of able young people. Commerce and industry demand more well-qualified young people. It is essential that higher education should have sufficient resources to meet that challenge. The resources need not come from the public purse. However, I regret that there is insufficient evidence of enough private funding to make me believe that enough public expenditure is allocated. There is still considerable scope for improvements to induce universities and polytechnics to look for more private finance. More imagination is required in joint financing schemes between Government and industry.
I return to the essential point that, if we are to be a competitive nation, so that we are prosperous, we must find the resources to educate and to train people to maximise their effectiveness. If we do that, we shall pull through some of the less able people in lesser skilled jobs. If we do not, this country will suffer in the coming years.
Although the debate is about overall public spending, I am certainly not one of those who want a massive increase in public spending. I believe that in corning years greater emphasis must be placed on higher education than the public expenditure White Paper shows.

Mrs. Renée Short: I wholeheartedly support the hon. Member for Stevenage (Mr. Wood) in what he said about the need to support science. The debate has been remarkable because there have been two speeches on that theme. Two days ago, three or four members of the Parliamentary and Scientific Committee had an interesting discussion with the Secretary of State for Education and Science about this matter. I hope that as the hon. Member for City of London and Westminster, South (Mr. Brooke), who was the Under-Secretary of State for Education and Science, is now a Treasury Minister, there will be a voice in the Treasury pressing the need for more support for science.
The Select Committee on Social Services always makes a point of looking at the public expenditure proposals. It always takes oral evidence from the responsible Ministers and produces a report on the proposals in the White Paper. In response to the Select Committee's recommendations several presentational changes have been made in the White Paper. This includes the chapters on DHSS expenditure. We welcome the additional information that has been published in the White Paper.
Despite the successive recommendations by the Select Committee, the White Paper still does not include an analysis of trends in real costs and volume of spending and in the volume of services. The Select Committee intends to take evidence later this Session on the Government's expenditure plans for 1986–87 to 1988–89 and will report in due course.
I support the recommendations of the Treasury and Civil Service Select Committee on the White Paper. The Committee recommended that next year the White Paper

should be deferred until later in the Session to enable other Committees, such as the Select Committee on Social Services, to report to the House. There would then be better informed debate on other aspects of expenditure.
The DHSS spends more than any other Department. In 1985–86, it estimates that it will spend £16·7 billion on health and personal social services and £41·2 billion on social security. The Minister for Health has acknowledged that hospital and community health services will need to grow by 2 per cent. a year to meet the Government's objectives, and this is to be achieved by a mixture of additional expenditure and efficiency. We always talk about improved efficiency.
The public expenditure White Paper states that health authorities are expected, from the total resources available to them, to meet pay and price increases, to meet the needs of the growing number of elderly people and to improve services. They are expected to do a great deal, are they not? The extent to which health authorities can do this will depend crucially on the level of this year's pay settlements and on their ability to make "cost improvements".
One might ask when is a cut in Health Service spending not a cut? The answer is when it is a cost improvement. The public, bemused by departmental gobbledegook, may well think that it means an increase in resources, but it is just the opposite. This gloss does not fool the Select Committee, the medical profession, the Royal College of Nursing, the Institute of Health Service Administrators or other royal colleges, all of which see their problems deepened by the closures, the increasing work load and the general decline in morale stemming from the Government's refusal to face up to the damage they are doing to our most precious asset.
We shall be monitoring the Government's efforts to achieve increased efficiency in hospital services, including the real impact of the Government's policy on competitive tendering and the effects of the Griffiths' recommendations, about which there are disturbing reports from some quarters. The Social Services Select Committee expressed a number of reservations when it looked at the proposals before they were introduced.
In 1981, the Social Services Select Committee recommended changes in the medical staffing patterns in hospitals to improve the quality of care to patients and to relieve the logjam of experienced senior registrars who were unable to obtain promotion. We recommended that there should be an increase in the number of consultant posts and a reduction in training posts. The Government accepted that recommendation, and we were delighted that they did.
In 1985, the Social Services Select Committee again looked at the issue, as it always does, to check what progress has been made, and found that the ratio of consultants to junior doctors had hardly changed. The Government have replied to our follow-up report, agreeing that little has happened and stating:
there appears therefore to be an impasse".
To resolve the problem, there is to be yet another review of the whole subject by the Government and the joint consultants' committee. The Minister for Health must be aware that there is support for the Committee's proposals among the responsible organisations in the profession, including the royal colleges and an enormous number of professional bodies which are concerned about this.
What will happen if action is not taken soon? I must refer to the warnings and recommendations that the Select


Committee on Social Services made in its first report on perinatal mortality. In the past five years since the report was published, we should have seen a consistent improvement in all the regions if our advice had been followed. If our advice regarding regional intensive care units had been followed, and units had been established which were well staffed and well equipped to save distressed new-born babies, there could have been improvements. A serious situation is developing in some of the teaching districts in London. I attended a conference across the river at St. Thomas's hospital about the situation in the South-East Thames region and was alarmed at the information supplied.
My own region, the West Midlands region, was one of the very seriously disadvantaged regions when we presented the report. It had a high perinatal mortality rate. However, I read in the local press only five days ago that plans to reduce the number of babies that die at birth in the west midlands are not working.
Some district health authorities could soon have their knuckles rapped unless there is a drop in the infant mortality rate. An article in the Express and Star on Wednesday 12 February 1986 stated that the districts causing most concern to the regional health authority are
Wolverhampton, Dudley, South-East Staffordshire, North Staffordshire, Shropshire, and Coventry, where the number of consultants are way below the RHA guidelines".
Despite all the plans for improvement and despite the health promotion campaigns that have been carried out, the expected improvement in the perinatal mortality rates has not come about. The article continued:
The report showed that the majority of the 22 health districts in the West Midlands region were suffering from staff shortages in their gynaecology and obstetrics departments. The report also stated:—
'There is scant evidence in district programmes of targeted smoking prevention campaigns, and only seven of the 22 districts short-term programmes contain any plans for the development of ante-natal preparations for pregnancy-planned parenthood services.'
There has been very little improvement, after five years, in a region that had one of the highest perinatal mortality rates, and that is a very serious situation. I hope that the Minister will consider that something needs to be done in order to provide more resources for the Department to carry out the policies that have been accepted.
In the White Paper, the Government repeat their original estimate that savings of £75 million would arise from the introduction of the limited list. We have noted that in the winter and spring supplementary estimates the cost of drugs has none the less risen considerably during the current year. In the reply to last year's report on the White Paper, the Government undertook to report to Parliament what savings were achieved from the introduction of the limited list. When and how is that information to be made available? Perhaps the Minister will provide that information shortly.
The information about future expenditure on personal social services given in the White Paper is so brief as to be almost meaningless. The level of local authority expenditure on social services will be determined in part by the Government's policy of reducing overall local authority spending. We shall continue to press the Government about the amount of money available for the development of community care, in particular for those

transferred from the National Health Service to the care of local authorities. The Government have accepted these policies and yet the resources to carry them out—whether for the care of children or the mentally ill and mentally handicapped in the community—are not being made available.
How much money is available from the sale of land and buildings now belonging to the Health Service to provide bridging funds for the range of homes, workshops, and community facilities that are needed for former patients from mental institutions when they live in the community?
Last week the committee published a report commenting on the Government's proposals for the reform of social security. Very little information has been given by the Government about the public expenditure implications of these proposals. It is estimated that the proposed family credit will cost nearly twice as much as family income supplement costs at present but that will depend on how good is the take up of the new benefit. Given the poor take up of family income supplement and the fact that it is not possible to predict how the change in paying the benefit through the pay packet instead of direct to the mother will affect take up, that estimate can be little more than guesswork at present.
Between 1986 and 1989, the DHSS is planning a huge investment in computers to administer social security benefits. I do not know how much the computers will cost, but the Committee will be keen to see if the Department's expectation of an eventual reduction in the administrative costs of social security is achieved. We do not know if that will happen. In the short term, many additional, temporary DHSS staff will be needed during training in the administration of the new benefit structure. I wonder how much that exercise will cost. The White Paper contains no estimate of the implementation cost of the new benefit structure or of the total cost of changing the dates of benefit uprating. There are many questions that the Select Committee will want to pursue during the course of the Session. We shall want to question Ministers about these matters. I hope that the Minister who replies will be able to answer some of the questions that I have raised.

Mr. Richard Alexander: I join many of my hon. Friends in congratulating my right hon. Friend the Chief Secretary to the Treasury on the emphasis in his speech today on value for money and efficiency. Often in these debates there is a call to make it clear what the distinction is between public investment and current public expenditure. That call is made every year and just as regularly that call is rejected.
If a public company went to its shareholders every year, without making that important distinction clear in its annual report, its directors would soon be in trouble. That means that outside pressure groups are left to decipher what parts of the White Paper mean a real rise in resources and how they will be properly spread. In turn, that means that outside pressure groups, which are hostile to the Government—by virtue of being pressure groups, they usually are hostile to the Government—are there to place the worst possible public construction on the Government's actions.
The Chief Secretary could claim that he is being benevolent in what he has announced today. I have no doubt that he is benevolent, but he ought not to make and allow such a public relations opportunity to slip by if he


is being benevolent. We all want to see the expansion of public investment, but when that investment is blurred by wage claims, wage costs and current expenditure, which in themselves often conceal unnecessary waste, support for increased expenditure is less warm particularly on Conservative Benches. Those who welcome increased infrastructure spending begin to wonder if the money is actually being spent on the infrastructure.
Under the present system, if cuts have to be made, they can be made easily by cutting public capital programmes. If waste occurs, as happened in the development of the Liverpool Crown court, where there was a slippage of some £36 million, that can be concealed under a global figure, and no one is any the wiser or greatly concerned. If my right hon. Friend wants an increased programme of support for the infrastructure, I urge that in these White Paper statements he should spell that out.
When the Government are making an effort to deal with the matter and, at the same time, create jobs, my right hon. Friend should say so and take the credit for it. To do otherwise, to blur what is being spent and where, is to invite the charge that we are merely throwing money away—as it is said, throwing money at the problem, with the implication that the policies are non-caring and badly thought out and that money is often wasted, which, in the present circumstances, it sometimes is. The charge is sometimes made that the Conservative Government cannot make up their mind whether they want increased public expenditure or less public expenditure.
Politicians are accused of giving evasive answers to questions on that subject. That is often because the wrong questions are asked. Conservative Members are in favour of increased capital spending which is not the same as increased public expenditure. There are essential works to be done in this country. Many of them are being tackled, but the fudge over what is capital and what is current expenditure does not help, as a study commissioned by the Federation of Civil Engineering Contractors made clear last July.
I wish to make one other brief but important point, related to the hostility of my right hon. Friend the Chancellor of the Exchequer, and presumably his colleagues on the Treasury Bench, towards allowing public utilities to borrow on the open market for their capital expenditure and expansion. It is beyond my comprehension that it somehow screws up my right hon. Friend's total financial strategy if the National Coal Board or water authorities wish to borrow from banks or elsewhere at rates which they believe they and their consumers can afford. The name of the game is, surely, expansion and jobs. If our utilities can achieve that, the Government's goals are achieved. In addition, that relieves the consumer from having to pay for expansion out of current annual charges.
One day someone will tell my right hon. Friend that the emperor genuinely has no clothes. I put that to him recently because the Anglian water authority told me that if it could borrow on the marker it could finance its current capital programme and increase this year's water charges by only 7·5 per cent., whereas if capital expenditure had to come out of the annual water bills, the ratepayer would have an increase of 14·6 per cent.
My right hon. Friend remained unmoved. He told me that it was no cheaper to borrow on the market than from the public works loan fund. I was not arguing about the cheapness of the rates. I was arguing that, like any prudent

business, the water authority must be entitled to borrow for future capital expansion instead of passing on large increases in the current year to pay for capital expansion in that current year. If public utilities were not monopoly suppliers, the customers would never stand for it. Water authorities do not want to finance expansion out of revenue, but the Treasury and my right hon. Friend the Chancellor oblige them to do so at present. I urge a rethink on that point. As the advertising hoardings used to say a year or so ago:
You know it makes sense.

Mr. Roy Hughes: I have gained the impression today that scepticism is felt on the Conservative Benches about the Government's policies. I put the hon. Member for Newark (Mr. Alexander) into that category. It would be fair to say that most, if not all, Opposition Members approach the Government's expenditure plans with some trepidation. They hear Ministers speak of cutting public expenditure, holding it steady and so on. The reality has been rather different.
The Government's record shows that our public services have deteriorated. The Government have had little success in reducing overall expenditure and, so far, their promises to cut taxation have been little more than a mirage. It can be said, of course, that hope springs eternal and that there is another Budget on the horizon.
When discussing such matters, I unashamedly reflect on the present plight of Wales. I think of the serious unemployment and the social distress which is a byproduct of that unemployment. I think of our south Wales valleys and the spirit of hopelessness about the future which lies alongside that heavy unemployment.
There has been a deterioration in the social services, including the National Health Service upon which many additional calls are made as a result of social conditions. There is a great deal of substandard housing, yet our local authorities are allowed to spend only 15 per cent. Of the revenue that they have obtained from the sale of council houses. An effort should be made to build many more houses. But I do not wish to dwell on the Welsh scene.
On page 9 of volume I of Cmnd. 9702, we see that the Department of the Environment's public spending on housing in 1984–85 is put down as £3·2 billion. That was estimated to drop to £2·7 billion in 1985–86, rising only to £2·9 billion in 1988–89. There is not much more on the horizon. The Government should be heading a housing drive at present. It would improve the environment, put people into decent homes and take a great many people out of the dole queue.
On Monday this week, my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) unveiled the Labour party's plan to use £5 billion of local authority receipts from council house and other asset sales to create 750,000 new jobs. It includes investment in housing, roads, sewers, railways, hospitals, schools and industry. What could be more sensible? That plan would help build a more efficient economy and put people back to work.
What is the Government's reaction to those proposals? In the Daily Telegraph on 18 February, the Secretary of State for the Environment is quoted as saying that my right hon. Friend the Member for Sparkbrook was like a pools winner
with a policy of 'spend, spend, spend'.


Surely there is a vast difference between spending money on worthwhile projects and squandering money, as the Government have done so profusely. We should think of the massive revenues that they have received from North sea oil. No other Government in history have received such largesse. Public assets such as British Telecom, the ports and Cable and Wireless have been sold. The sale of British Leyland is on the horizon. There are proposals for the sale of British Gas and even of our water resources.
Vast resources have been simply showered on the Government and all they have to show for it, after nearly seven long years, is mass unemployment. That, for me, is the essential difference between the spending which my right hon. Friend the Member for Sparkbrook envisages and squandering our resources which the Government have done on such a massive scale.
Defence expenditure is still going up. According to the document, it went up from £15·5 billion in 1983–84 to £19 billion in 1988–89. During defence questions last week we were told that Trident was costing nearly £10 billion at 1984–85 prices. That amount is for ever escalating, and we have been promised a new figure shortly. The policy of the Labour party is to scrap Trident and to spend the money on more worthwhile projects. We believe that conventional weaponry is sufficient for our defence needs. I believe that money spent on Trident is simply money poured down the drain.
Youth unemployment is a vital issue. Our young people have become known as the lost generation. On Tuesday my hon. Friend the Member for Huddersfield (Mr. Sheerman) sought information on the youth training scheme. The answer he received suggested that more than half our Welsh youngsters coming off the YTS last year failed to get a job. With the exception of the north of England, Wales has the worst youth employment record in the United Kingdom. We need to attract new jobs to the north of England, Wales and Scotland. The Government should be in the vanguard of those efforts.
One recognised way of doing that over the years has been the policy of regional aid. Since 1979, regional aid to Wales has fallen by 40 per cent. It is set to plunge further by the end of the decade, despite the fact that Wales has lost 110,000 jobs in manufacturing since 1979. Is it any wonder that our young people have become so alienated from society and that crime statistics are going through the roof?
At Prime Minister's Question Time on Tuesday, my right hon. Friend the Leader of the Opposition accused the Prime Minister of breaking all manner of records:
record and rising unemployment, record real interest rates, record manufacturing trade deficits and a record tax burden."—[Official Report, 18 February 1986; Vol. 92, c. 185.]
In reply, the Prime Minister spoke of what she considered to be her record-breaking achievements. All I can say is that Wales has been on the receiving end and our people are punch-drunk with the effects of those policies. Surely the time has come for a change of course.

Mr. John Townend: I am sure that my right hon. Friend the Chief Secretary will be relieved to know that I will not make my special pleading for an increase in expenditure. However, before I begin my

remarks I should like to raise a point which I had hoped to make during the speech of the hon. Member for Stockton, South (Mr. Wrigglesworth). I was rather surprised that he was advocating a substantial increase in overseas aid when some of my constituents have received a letter from his right hon. Friend the Member for Plymouth, Devonport(Dr. Owen)telling them what a poor country we are and how our share of world trade has dropped by half between 1980 and 1984. The letter said that we were in the same league as Yugoslavia, Taiwan and Puerto Rico. If that is true, I cannot see how he could justify spending more than the £1 billion we already spend on overseas aid. In fact, we probably could not afford that.
My first reaction on studying the White Paper on public expenditure this year was that hope springs eternal. I am relieved that the Government, in their own words,
still intend to hold spending broadly level in real terms.
However, I must say that based on past performance I am sceptical as to whether that can be achieved. I think, like other hon. Members of the Select Committee, that it represents what the Government hope will happen rather than what they think will happen. In last year's expenditure White Paper the expenditure for 1985–86 was estimated to be £132·1 billion. This year's White Paper shows that that figure was exceeded by about £2 billion. We have heard from the Chief Secretary that he hopes that there will be no overspend this year. If he keeps to the figures, I think that he will deserve our congratulations.
For 1986–87, last year's White Paper showed that the planning total, less receipts from asset sales, was to be £138·9 billion whereas for the same year in this year's White Paper it amounts to £143·8 billion, an increase of £5 billion. I think that that confirms what many of us have been saying for years, that the relentless increase in departmental spending seems to continue year after year. The full extent of the rise is, to a certain extent, hidden by an increase in asset sales between the two years of £2·5 billion. So much for all the Opposition talk of cuts.
I was pleased to hear the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) admit that there have been no cuts. Across the board there have not been cuts. However, he was less than honest when he talked about cuts in education. In fact, the real expenditure per pupil today is higher than it has ever been in our history. We have more nurses, doctors and more patients being treated, so it is rubbish to talk about cuts. I am saddened that the Government have given up the battle to cut public spending and are now merely aiming to reduce it, as a percentage of GDP. I think that change of policy was forced on the Treasury by the high-spending Ministries. They have undermined a major thrust of Thatcherite economic policy. As a result of that, we have not been able to make the significant reductions in taxation that we had hoped for, particularly for the average wage earner, and we have not been able to bring the standard rate down to 25p in the pound. We have not been able to deal with the "Why work?" problem which has been so ably highlighted over so many years by my hon. Friend the Member for Norfolk, North (Mr. Howell). If we had been able to keep departmental cash spending down to the figure set out in 1984 White Paper, only two years ago, we would have had an extra £5 billion to dispose of this year. With that money we could have reduced the standard rate by almost 3·5p in the pound which would have put us well on the way to achieving our target of 25p in the pound.


In view of the drop in oil prices which will cost us anything from between £5 billion and £7 billion in lost oil revenue, I believe that the control on spending is even more important. I was sorry that my right hon. Friend the Chief Secretary did not really deal with the point that I raised in my intervention. If revenue is to determine expenditure, and we have a significant loss of revenue, as we have had, surely we must reconsider our spending plans. In view of those factors, I strongly urge the Government to return to their policy of cutting expenditure.
We have not been as successful as we hoped in controlling expenditure by local authorities, the Department of Health and Social Security, and on debt interest. Local authority spending for 1985–86 turned out to be £2 billion more than was forecast in the 1984 White Paper. That hides some disturbing facts. On the one hand, careful low-spending councils in the districts and shires have reduced spending, or kept it level, while many of the Left-wing-controlled councils in the big cities, such as London, Liverpool, Hull and Sheffield, have increased spending. In some extreme cases, they have spent money as if it was going out of fashion. It is unfair that many careful low-spending councils have had their grants reduced, while profligate inner-city councils have received additional grants to deal with their problems as a result of pressure from the Opposition, the churches, charities and some of my hon. Friends, especially as many of those problems have been self-imposed.
The Government are optimistic that local government spending will fall, as the table in the Select Committee's report shows. I wish that I could be as optimistic as the Government. However, I am delighted that they have decided to grasp the nettle of rate reform. If only our party had dealt with the problem in 1980, as the Prime Minister wanted to do, we would not have encountered many of the problems that we have since faced.
Social security spending is £1·7 billion more than was estimated in the 1984 White Paper. In recent years, some aspects of social security spending have been almost out of control. Housing benefit has increased from £300 million to £3 billion in 10 years, and the costs of board and lodging and the black economy have also increased. Most people will agree that the social security system is in a mess. It is a complicated morass and suffers from enormous abuse which we cannot afford.
Recently, I was horrified to learn that before the DHSS fraud squad arrived to investigate and prevent taxpayers being defrauded, the beneficiaries, many of whom may have been claiming improperly, were warned by the staff at the local DHSS office. That is wrong.

Mr. Alexander: Does my hon. Friend agree that as soon as that squad went in the number of people claiming benefit decreased significantly in those areas?

Mr. Townend: That is absolutely right, and shows that the social security fraud squad was a good investment. The number of claimants would have decreased still further if it had received more co-operation from the local offices.
The reform and simplification of the social security system is vital, and should be undertaken with determination and with a view to reducing the overall cost. Originally, the Government intended to make savings through the review, but because of pressure that aim has been watered down, and it is now being said that the

review will have a neutral effect in terms of revenue. I am particularly perturbed that if we are successful in simplifying the procedures there will inevitably be a significant increase in take-up, and the review, instead of being broadly neutral in revenue terms, could provide another burst of spending in that Department.
The Government must accept some of the blame for social security costs. We introduced housing benefit. Indeed, I remember serving on the Bill in the previous Parliament. To be fair, when the Government tried to control the cost which was getting out of hand, they met nothing but resistance from both Opposition parties and some of my hon. Friends. The same is true of the board and lodging allowance. When it became generally known by our young people that they could be subsidised by taxpayers to leave the disciplined environment of their parents' home, and could receive twice, and sometimes three times, as much money as they could earn in a job immediately after leaving school, the costs soared sixfold. Again, when the Government, rightly, tried to control the cost, they received nothing but opposition from Labour Members.
Now we have yet another explosion, which is worrying me greatly and which will cost my right hon. Friends at the Treasury a great deal of money. I refer to the establishment of private homes for old people subsidised by the DHSS to the extent of about £165 a week. The costs of that are spiralling. It is inexplicable to a man in the north of England who is struggling to keep a wife and two children on a wage of about £100 a week that the state should pay £165 a week for a person in a private home. It encourages families to abrogate their responsibilities, and to make the state responsible for their old people.
That is having a significant effect in many constituencies in seaside towns, such as Bridlington, as it is undermining the base of the tourist industry. One can understand why hoteliers, who must work hard for 13 weeks to make a living for the whole year, are encouraged to turn their hotels into old people's homes, which will be full for 52 weeks a year and will receive a large weekly subsidy from the DHSS. Many of them think that they have struck a gold mine, but the result is the undermining of our tourist base.
The black economy is enormous and growing. About 1 million people are probably involved in it, and the cost to the Exchequer runs into billions. Those people draw benefit, increasing the cost to the DHSS, although they work in the black economy. Because they draw benefit they are included in the unemployment figures when, in reality, they are not unemployed. The black economy spreads throughout the country, but is most prevalent in the south, especially the south-east. It is incredible to think that 800,000 people are registered as unemployed in the south-east when one considers the large numbers of vacancies, and learns that employers in the hotel and restaurant business have had to import 150,000 foreigners from the Philippines, Spain and Germany to fill those jobs. The most important evidence of the black economy is that in the south more people are registered as long-term unemployed than in the north, yet, as hon. Members on both sides of the House will readily accept, the problems of unemployment are significantly worse in the north. Therefore, there can be only one possible explanation—there are more long-term jobs in the black economy in the south.


Until we tackle that problem we shall never reduce public expenditure in the social services Department, and we shall not reduce the numbers of unemployed. We should take a much tougher attitude to withdrawing benefit from people registered as unemployed who will not accept a vacancy. We may even have to experiment, as the Americans have done, with providing work for some of those people at the level of unemployment pay.
Because of Government spending and borrowing, the costs of servicing the national debt rise inexorably year after year. As the Select Committee report points out, the figure of £17 billion in the 1985 White Paper will increase to £19 billion by 1989. Indeed, if the interest that we have had to pay this year had been the same as our estimate for it four years ago, we would have had a further £5 billion to spend on Budget day. Those who say, "Spend more and borrow more"—they include many Conservative Members as well as Opposition Members—should not forget that in future the debts must be serviced and repaid. The higher the national debt, the higher the burden that we hand on to our children and grandchildren.
I congratulate the Chancellor of the Exchequer on the way in which he has handled the economic position during the past four weeks in the face of an enormous drop in the price of oil. If we had not had such a steady hand on the tiller, we would inevitably have had significant further increases in interest rates, and Opposition Members would have been the first to criticise. But our Chancellor has kept his head, and kept the boat steady. He is under great pressure to increase spending on everybody's little pet scheme. There are voices on the Tory side of the House and in the country that say to the Government, in view of the drop in oil revenue, "Go back to your original policy of reducing spending and borrowing."

Mr. Tam Dalyell: As one who rightly or wrongly voted against the Anglo-Irish agreement, perhaps I am in a position to say that I found the maiden speech of my hon. Friend—for that is what he is—the Member for Newry and Armagh (Mr. Mallon) deeply moving.
It comes a bit rich for the hon. Member for Bridlington (Mr. Townend) to lecture us on social security when we see in the Register of Members' Interests that he is a member of Lloyd's. Like the old biblical saying about motes in one's own eye, I believe that members of Lloyd's who make that type of speech should show a little humility when they talk about those problems. I do not doubt that the black economy is a problem, but he told us about the firm hand on the tiller. When the Prime Minister and the then Financial Secretary to the Treasury were in the early stages of this Government they said that they would sort out the black economy. They have not done very much. It may be a difficult task, but those who keep the Inland Revenue Staff Association so short of personnel cannot be entirely surprised when they get into difficulties.
If we make remarks about those on social security, we should deal not with the minnows but with the massive problems, such as those of insider trading. The Department of Trade and Industry has had difficulty in achieving more than five prosecutions for insider trading. In one case the wrong person was prosecuted, and acquitted. He happened to be my constituent. Let us see

some sense of proportion. Frankly, the middle of the speech of the hon. Member for Bridlington was vulgar and odious.
My constituency has many thousands of acres of Forestry Commission land. It is well managed and well organised. The planting scheme has been carried out with great care and with great community acceptability. It is wholly unacceptable for the Government to suggest that Forestry Commission land should be sold off to private interests in lumps of tens of thousands of acres. My hon. Friend the Member for Aberdeen, North (Mr. Hughes) knows what that would do in the Grampian area. That is not the way in which Britain should be run in the 1980s.
I declare an interest. I have the good fortune—the money accrues to my constituency party and not to me—to be a Member sponsored by the National Union of Railwaymen. In his opening speech the Chief Secretary said that expenditure on the railways would increase by 9 per cent. in real terms. That was followed by the chiding about the £21 billion to £24 billion spent on unemployment benefit. For every million pounds spent on electrification, which I do not believe is very job creative, on track maintenance, which is job creative, and on replacement of new rolling stock, which is job creative, how much money will return to the state? When the unemployment benefit that would have to be paid out, the taxes collected that would not otherwise be collected from firms and individuals, adjustments to national insurance and housing benefits are taken into account, we are faced with a cost benefit analysis that may make much needed investment in the railways cheaper in the short term than is being made out. I ask for some type of Treasury assessment, because the matter was raised in depth at the political committee of the NUR this morning. There are many other people who would like a Treasury assessment.
The blue paper refers to the Falklands. The figure of £192 million is quoted for two years hence. If the islands are to be properly defended, as they must be as long as the commitment continues, some of us believe that what the Chief Secretary said about the finality of the figures may be relevant, but we doubt very much the figure of £192 million. I should like a letter on how the Government arrived at that figure.
I wish to discuss the science budget, which was raised by the hon. Member for Crawley (Mr. Soames) and other hon. Members. Save British Science and those in science in Britain believe that something must be done. I interrupted the Chief Secretary's opening speech to ask about the Medical Research Council. He talked about priorities to help the council. The council refers to the prospects of new ventures which continue to open up. It says:
The challenge presented by such opportunities is, sadly, tempered by the grave concern which the Council must continue to express over the inadequacy of the funds which are made available through the Science Budget. During the course of the year the Chairman and Secretary met the Secretary of State for Education and Science and, subsequently, the Prime Minister, and took the opportunity to emphasise the severely damaging effect that the financial situation was having on medical research in the UK. Representations were also made through the Advisory Board for the Research Councils.
Yesterday I had the opportunity to talk to the secretary of the MRC, Sir James Gowans. He pointed out that whereas in the days of his distinguished predecessor, Sir Harold Harmsworth, there was a five year basis on which people could be assured of having their research financed, the


basis was now year to year and, in some cases, month to month. That is not the way to run medical research in Britain. The councils' report continues:
In December 1984 the Secretary of State announced a small but welcome increase in the Science Budget as a result of which the Council received an addition to the planned allocation for 1985/86. This will increase the total resources the Council can make available for capital equipment and thus assist towards the provision of the PET scanner referred to in the Introduction and allow slightly increased funds for research grants to universities. However, the overall net effect of these supplements will do no more than maintain in 1985/86 the same purchasing power as existed in 1984/85—the severe difficulties the Council had in matching expenditure to income in that year are set out. The likelihood of concurrent reductions in research funding through the University Grants Committee can only exacerbate the Council's problems.
The Council recognises the government's commitment to controlling public expenditure and accepts the need to ensure that resources granted to it are deployed efficiently and reviewed critically. But if strenuous efforts to make better use of resources do no more than allow the Council to accommodate to a declining budget, and do not allow resources to be found for new activities, then the wealth of opportunities presented by biomedical research cannot be exploited. For example the explosive growth in the understanding of molecular and cell biology means that there are now opportunities for advances in such diverse fields as: cancer therapy; inherited, parasitic and psychiatric diseases; clinical diagnosis; and drug design. Each of these could bring significant benefits to the health of individuals in the community and to the quality of life of future generations yet unborn.
That is the considered judgment of these careful people of the MRC.
I have had eight Ten-minute Bills on the subject of kidney transplantationss. Those who know about the shortage of matching tissue for kidneys and about the problems associated with kidney machines and the financial problems now associated with those unfortunate sufferers from kidney disease realise that this presents just one example of raised expectations that cannot be fulfilled in this financial climate.
The same story applies to the Science and Engineering Research Council. It says:
The limiting factor in the Council's work at present is the shortage of funds. In all its fields, ideas and projects which have been judged worthy by its own high standards are going unfunded. In many of these fields, reviews by independent scientists and engineers have come up with even further constraints of selection. The Council is grateful that its grant has been maintained in real terms over the last few years.
However,
the external pace made not only by the United States of America and Japan but by France and Germany; the continuing growth of the sophistication of scientific equipment; the under-provision of staff costs; the greater training needs as manufacturing technologies also become more sophisticated and new markets are sought; the frequently disadvantageous effect of international exchange rates,"—
we have seen this in relation to the problems of CERN—make this very difficult.
Two weeks ago I spent an afternoon at the Department of Biochemistry at Oxford. Postdoctoral and young scientists, Professor Southern said,
are facing something akin to a cultural revolution.
I wonder whether the House realises that by the 1990s the Department of Nuclear Physics at Oxford will have more than half of its staff over 60 years of age. Yet this is a young person's science. When we consider what our competitors in other countries are doing, that is tragic.
I was at the University of Dundee in January. The same story applies to its electrical engineering and other departments. It is the same story in the schools. The recent reports of Merrison at Bristol and the letter of Mr. J. T.

Jardine, which I have asked to be published in Hansard on behalf of Scottish teachers of physics, tell a story that makes one wonder where all the seed corn for this important area will come from.
I shall cut what I intended to say about the Nature Conservancy Council. However, when he was the Minister of State, Ministry of Agriculture, Fisheries and Food, the Chief Secretary to the Treasury said that it should become more efficient. Those who have studied the matter say that to do away with the Macaulay Institute of Soil Research at Aberdeen is but one example of the madness of dismantling British science.
I was not called, but I sat through yesterday's debate on the strategic defence initiative. I understand why Professor Desmond Smith and Dr. Andrew Walker of the Physics Department at Heriot Watt University want to have the crock of gold of American money, otherwise where will the finance for their physics come from? Some of us believe that a great issue is at stake and that Dr. Burnett, who is the Principal and Vice-Chancellor of the University of Edinburgh, was right to say that there should be no SDI research at Edinburgh university until there had been further discussions.
It is tragic that we should embark on the militarisation of space simply because there are no alternative funds for distinguished science departments in British universities to call upon. I plead with the Government to do something for British science. An indication of the urgency of this need has been the formation of the Save British Science campaign.

Mr. Tim Yeo: In view of the shortness of time available to me, I hope that the hon. Member for Linlithgow (Mr. Dalyell) will forgive me if I do not go down that avenue. Instead, I shall return to some of the themes that were dwelt upon so eloquently by my right hon. Friend the Chief Secretary to the Treasury when he opened the debate, and I will deal first with the objectives of public expenditure.
I welcome the fact that the White Paper refers in each of its departmental sections to the aims of public spending. That is an improvement upon previous White Papers. I readily acknowledge that there has been considerable improvements in the presentation of this White Paper and I pay tribute to my right hon. Friend, whose interest in the better management of resources and in greater efficiency is well known. However, these aims are still stated in fairly vague terms.
For example, it is stated that the main aim of the overseas aid budget is to
promote sustainable economic and social development and to alleviate poverty in developing countries…Political and commercial considerations are taken into account in allocating funds.
There is no reference to any percentage target or gross national product that we hope to reach for overseas aid, or to any Government mechanism for monitoring whether it is more cost-effective to grant aid directly, Government to Government, or through the medium of voluntary agencies. I should have been comforted by references of that kind.
Furthermore, the aims make no reference to a Government target for reducing the number of dwellings that are still below standard, or to any objective for


providing housing in areas where the employment option exists. The aims would be greatly strengthened by references of that kind.
Above all, as my right hon. Friend the Member for Worthing (Mr. Higgins) and his Committee point out, no attempt seems to have been made in the White Paper to distinguish between the relative priorities of one area of expenditure compared with another. Although my right hon. Friend the Chief Secretary of the Treasury refers to chart 1.11, that is not the whole answer. It may simply reflect the consequences of different bilateral battles that have been fought between the Treasury and individual Departments.
Somebody who read the White Paper wanting to find out whether the Government attach greater priority to education or to transport would find that the only clue is on page 2 of volume 1, in the section entitled "Main points from this White Paper." It draws attention to the fact that additional funds have been allocated this year to four areas, one of which is capital spending on roads.
Education is not mentioned in any of those four areas. That might suggest that at least during the period when the White Paper was being drawn up—I understand it was a number of months—transport was given a higher priority than education. I wonder whether that was a conscious or collective decision. I hope it was not; if it was, I doubt whether that reflected the mood of the country.
The first conclusion that I draw from the White Paper is that, despite a considerable advance in its presentation, it still reflects the basis upon which expenditure decisions are made; that is, basically bilateral negotiation, as the Select Committee pointed out. One consequence is that, if a Department wants to increase expenditure in one sector for which it is responsible, it has to attempt first to meet that extra expenditure by a saving from somewhere else within its departmental budget.
Suffolk county council, for example, which has been a model of efficiency in its management and which has a prudent and impeccable expenditure record, finds that this year its rate support grant is cut substantially, despite all its efforts to comply with Government policy, so as to pay for the extra expenditure which the Department of the Environment wishes to allocate to inner cities.
My second point, which follows from the first, is that the vagueness with which the aims are stated makes it difficult to measure whether public expenditure is effective in reaching those aims. If no criteria are clearly defined in the White Paper for judging success, how are we to analyse the performance of Departments? There are still far too few measures of output in the White Paper, although I welcome the fact that there are more measures of output than we have ever had.
The section on the Department of Health and Social Security includes figures for patient treatment, one output measure which is welcome, but it is not complete or adequate, nor is it necessarily the most important. Others that might have been included are life expectancy, mortality rates, the incidence of specific disease, the number of days lost from work through illness and the variation in health between classes and occupations. If those output measurements had been included in the White Paper, we should have had a real basis for judging whether the National Health Service was effective in achieving the

aim of a healthy nation. Incidentally, if we reached that aim, it might result in a reduction in patient treatments and in NHS expenditure.
On my third point, value for money and efficiency, again I welcome the much greater emphasis which the White Paper appears to put on getting value for money. There are many references to it. The emphasis on privatisation and on outside sub-contracting is to be applauded, but huge areas of public expenditure are not touched. Anyone who comes into contact with the public sector could identify areas where improvements and savings could be made, but in the main improvements are not being made. It is no use expecting officials to change the habits of a lifetime and suddenly to be driven out of their comfortable ways into innovatory initiatives aimed at improving efficiency. The only way it will happen is if there is determined leadership.
From my experience of organisations which are not threatened with commercial competition and where the ultimate sanction of bankruptcy or redundancy does not hang over the employees I know that a relentless and laborious drive from the top is required to achieve better value for money. Parliamentary pressure encourages Ministers to concentrate on policy development and presentation, but I urge them to pay more attention to the unglamorous task of good management, without which we shall not achieve a better use of resources.
I wanted to make a fourth and final point about expenditure on unemployment, to which the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) drew attention as the fastest area of expansion, but I am aware of the time. As a Back Bencher I appreciate that seven minutes is a generous allocation. Having sat through the whole debate, I should not wish to encroach on the half hour that is available to the Opposition Front Bench. So I shall leave out the last point, which might have been mildly helpful to them.

Mr. Terry Davis: This debate will be remembered for the maiden speech of the hon. Member for Newry and Armagh (Mr. Mallon). The House heard a moving description of the problems of his constituency, economic and political, and his plea for a spirit of benevolence and justice.

Mr. J. Enoch Powell: I wonder where the friends of the hon. Member for Newry and Armagh (Mr. Mallon) have all gone to. I wonder why they did not tell him that it would be convenient for him to be in the Chamber at 9 o'clock.

Mr. Davis: I think that most hon. Members, in a spirit of courtesy and generosity, will extend to the hon. Member for Newry and Armagh the usual understanding for a new Member and will not wish to draw attention to that fact.
I was impressed by the hon. Gentleman's sincere declaration of his aim to create Irish unity by peaceful means and his equally sincere condemnation of the obscenity of violence—as he referred to it—in Northern Ireland. The hon. Gentleman paid a tribute to his predecessor, and I think that he will find that the House will accord him even greater respect as a result. It was a poignant tribute as his predecessor was his political opponent. It is also there that there is a bond between those


of us who have lost elections. On a lighter note, there is an even closer bond between those of us of all parties who have lost our seats. I express the hope that the hon. Gentleman does not join our group.
This debate also gives me the opportunity to welcome an old opponent, the right hon. and learned Member for Dover (Mr. Rees), to his new role. His was not a maiden speech, but I shall treat it as such. I am glad that he has decided to maintain his interest in our economic affairs and to contribute to our debates from the Back Benches. I suspect that if he continues to do so we shall all benefit from contributions based on his insider knowledge. Perhaps we shall benefit almost as much as we do from the contributions of my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). The right hon. and learned Gentleman bids fair to become the next Chairman of the Public Accounts Committee when my right hon. Friend becomes the Chairman of the Select Committee on the Treasury and Civil Service after the next election.
That brings me to the contribution of the present Chairman of that Select Committee. I am sure that the right hon. Member for Worthing (Mr. Higgins) will not mind if I do not comment on his detailed remarks about the presentation of the White Paper. I appreciate that he has been in his place for almost all the debate and has listened to the contributions of Members from both sides of the House, and I hope that he will excuse me if I do not go into the detail which he included in his speech. The Opposition are much more concerned about the policies and priorities that are reflected in the White Paper.
The right hon. Member for Worthing told us that it is now the Government's intention to control public expenditure rather than to cut it, but the White Paper does not support that statement. The Government's figures show that they are planning to spend less in real terms next year than they are spending in the current year. The only way in which the right hon. Gentleman can dress up the Government's figures to show stability in public expenditure is to remove the proceeds from selling national assets—something which I agree that we should do—and to include the figure which his Committee, the Select Committee on the Treasury and Civil Service, has described as an "above normal reserve", while ignoring the changes in the procedures for setting priorities and allocating reserves. The Chief Secretary to the Treasury described some of the changes this afternoon, but some remain that he forgot to mention. I will return to this point.
For the present, let us accept the White Paper figures at face value, as we are asked to do by the Government, and move on to consider the Government's priorities. First, there is to be a reduction in social security expenditure. It seems that at last the hon. Member for Bridlington (Mr. Townend) is getting his own way. He has often called for a reduction in expenditure on social security, and this coming year he will be pleased, for there is to be reduction in expenditure on supplementary benefit. The reduction will not arise from any reduction in the number of unemployed. I suspect that instead there will be a reduction in the moneys which are paid to those who are poor. As the Labour party has always claimed, the purpose of the social security review is not to redistribute from the poor to the very poor. The idea behind it is to reduce the total sum which is available to the poor in order to finance tax cuts. If the Government's record is any guide to their

future intentions, their aim is to pay for tax cuts for the very rich by reducing expenditure on supplementary benefit.
My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) spoke about the reduction in expenditure on education. The White Paper shows a reduction of £800 million in real terms—5 per cent.—in the coming year. It also appears that there is to be a reduction of 10 per cent. in real terms by 1988–89. The reduction is scheduled to take place at a time when the school population will decline. However, it will decline by less than 5 per cent. I do not understand how a Government who are supposedly seeking to preserve and improve education standards can use the opportunity of a decline in the school population of 5 per cent. to cut expenditure by 10 per cent. in real terms, and we have had no explanation of why the Government claim to be able to reduce expenditure twice as quickly as the reduction in the school population.
I have studied the more detailed figures in volume II to see where the cuts in education will be made. My hon. Friends will not be surprised to find that, during the next 12 months, the biggest cut in cash terms will take place in the provision of school meals and milk. The cut will be from £426 million to £280 million—a reduction of £146 million—a cut of 34 per cent. in the provisions for school meals and milk. We have had no details of how these cuts will be introduced and no explanation of which children will not receive subsidised school meals and milk in the future, but we do know that only five years ago even this Government were forced to publish the Black report on inequality in health. That report prepared, not by the Labour party, but by a group of independent experts, recommended that there should be an expansion of the school meal service if we are trying to improve the health of British people.
That was the burden of the speech of my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short). My hon. Friend described the many areas in which we needed to extend and improve the National Health Service. She movingly described the needs of the National Health Service. In response, the Government have said that they are going to increase expenditure on the National Health Service next year by 7·5 per cent.in cash terms. However, in real terms the increase is only 1·7 per cent., which is less than we need to stand still. That is not extending the National Health Service—by any yardstick that is a cut in the National Health Service.
The Black report stated that it was important not only to look at the expenditure on the National Health Servce but also at expenditure on other social programmes such as housing. If we are trying to improve the health of British people, we need to improve the housing stock.
The greatest failure of the Government is housing, and the Government's provision for housing deserves the greatest criticism—[Interruption.]—The Chancellor of the Exchequer can snort and sneer, but it is true.
I was pleased at first sight—as I was intended to be pleased—when I studied volume I of the White Paper. It stated that in the coming year, there would be an increase in expenditure on housing. Taken at face value, there will be an increase of £0·1 million next year. Of course, in cash terms £0·1 million—£100,000—is the sum not to be sneezed at. However, when I studied volume II my pleasure disappeared. I found that the sum is not £100,000 but £10,000. The sum of £0·1 million in volume


I is shown as a result of simply rounding up. The correct figure of £10,000 increases the housing provision from £2,742 million to £2,752 million. In the White Paper that is shown as an increase of £0·1 million.
They are figures which are designed to confuse. I do not call these figures "fiddled figures" but "misleading figures". They are designed to confuse because they are net of capital receipts whereas it is the gross expenditure which matters in terms of bricks and mortar. How much will be spent altogether? The Government's White Paper refers to an increased provision. If the Chancellor wishes to intervene I will, of course, give way. I would prefer to hear what he has to say instead of listening to his mutterings.
The Government refer to an increased provision of £330 million in 1986–87 over 1985–86. The truth is that it is £40,000 less when compared with the outturn for 1985–86, but even these figures are cash and not real terms. In fact, there is a more substantial cut in housing expenditure in real terms. This year, the Government are spending 18 per cent. less in real terms compared with last year. Next year, they will cut the housing budget by 4 per cent., a cut of more than £100 million in real terms. The Government admit in the White Paper that
The major part of public expenditure on housing supports the provision, repair and maintenance of rented housing by local authorities and housing associations·new building by local authorities, housing associations
is necessary to provide for the elderly, the disabled and others whose needs cannot be met in the public sector.
Against this background, no hon. Member will have been deceived by the Chief Secretary's attempted sleight of hand today. He admitted that there has been a reduction in the number of houses built by councils and housing associations—the accommodation specifically
for the elderly, the disabled and others whose needs cannot be met by the private sector.
He then sought to defend that catastrophic decline in council building by referring to an increase in private ownership. He knows that that is a totally different question. The housing shortage will not be solved by the sale of council houses. Whether houses are owned or rented, and owned by councils, housing authorities or individually, is irrelevant in any debate about the housing shortage. We shall solve the housing shortage only by building more houses, and that is precisly what will not happen under this Government.
Whether one looks at starts or completions, the total for 1985 was lower than in both 1984 and 1979. In every year since the Government came into office, the total of council and private new build has been lower than the last year of the Labour Government. Moreover, it has been lower than for every year of the previous Conservative Government. In no year in the 1980s have the Government matched the house builiding figures in the worst year of the 1970s.
Worse, the starts and the completions for both council and private accommodation in 1985 were lower than in the last year of the Labour Government.
At a time when 400,000 building workers are unemployed, it is nothing short of a scandal for the Government to prefer them to spend their lives sitting at home instead of building homes for other people.
Some Conservative Members say that they would like to see a better housing building programme—they remember a time when there was a different Conservative

Prime Minister. However, they then go on to ask, "How can we pay for the extra houses?" The Government know the answer, and I shall tell their supporters.
The increase in a housing building programme can be paid for without any extra taxes, borrowing or printing money. All the Government need to do is tell local authorities that they can spend their money on building houses. The councils can spend £3 billion in cash—they have billion in total—that the Government have locked up in bank accounts. It is not the Government's money but the councils' capital receipts.
A Labour Government would unlock the accounts and encourage councils to spend money on providing homes for people. We should increase public expenditure. That policy is supported not just by the Labour party and, as one would expect, the TUC, but by the British Institute of Management, the chambers of commerce, and even in some respects by the CBI, on the basis of the commission established by the Archbishop of Canterbury, the policy is supported by the Church of England. It is not supported by the Select Committee on the Treasury and Civil Service, but it is supported by the Select Committee on Employment, which perhaps cares more about the level of unemployment.
Why will the Government not increase public expenditure? Why do they insist on cuts in social security, in education and in housing? The reason is that they have priorities different from those of the Labour party, the TUC, the British Institute of Management, the CBI and the Church of England. In short, their priorities are different from those of the rest of the nation.
The Chief Secretary devoted a large part of his speech to the procedure adopted by the Government for setting their priorities. We have the testimony of the right hon. Member for Worthing that the Chief Secretary is bringing his own personal approach to the setting of priorities. The Chief Secretary omitted to mention a major part of the new procedure for holding down public expenditure to the planning totals by Departments contained in this White Paper. The Chief Secretary no longer takes such decisions, nor does the Chancellor of the Exchequer. Anyone who managed to get as far as the back page of today's Financial Times will know that it is someone else altogether.
Under the new procedure, any Secretary of State who becomes convinced that he needs more money and has a good case for using some of that above-normal reserve of £1·4 billion; who thinks that the money should be used for job creation instead of tax cuts; or who decides to boost his leadership campaign by showing signs of rising damp must in future not simply seek to persuade the Chief Secretary to the Treasury or even convince the Chancellor of the Exchequer, if that were possible. He must put his request in writing and send a detailed justification to the Chief Secretary. There is nothing wrong with that, but he must then send a copy to the Prime Minister.

Mr. John Townend: Quite right.

Mr. Davis: That is not quite right. The hon. Member for Bridlington welcomes that. We all know about his motives. The Prime Minister will now take the decisions. What is the point of sending copies of correspondence to the Prime Minister? What on earth will the Prime Minister do with all these pieces of paper, assuming that she is not too busy dealing with requests from Cabinet Ministers to leak their colleagues' correspondence? The point of it can


only be that the Prime Minister does not trust the Chief Secretary. The Chancellor does not even get a copy. It is the Prime Minister who sets the priorities.
The right hon. and learned Member for Dover spoke about the powerful role of 10 Downing street in economic policy under the last Labour Government. Not even the right hon. and learned Gentleman would ever suggest that any Labour Prime Minister insisted on receiving copies of letters from Members of the Cabinet to the Chief Secretary to the Treasury.
Of course there must he priorities, but in this Government it is the Prime Minister who sets them. The Chancellor of the Exchequer can smile because his in-tray will be empty. He does not even rate a copy.
The Prime Minister is not listening to hon. Members, the TUC, the British Institute of Management, the CBI or the Church of England. She is turning a deaf ear to the people and is impervious to argument or protests. She is turning her face away from all the signs of social unrest, from the riots that have occurred in Bristol, Brixton and Birmingham. She is like a latter day dictator on some island in the Caribbean waiting to be airlifted out with her entourage in a fleet of American helicopters, leaving her Back-Bench Tontons Macoutes to face the wrath of the British people.
The Opposition will vote tonight not only against the White Paper but to prevent the whole of the United Kingdom from becoming like Newry and Armagh.

The Financial Secretary to the Treasury (Mr. John Moore): Like the hon. Member for Birmingham, Hodge Hill (Mr. Davis), I should like to start by joining him and others who have congratulated and welcomed the hon. Member for Newry and Armagh (Mr. Mallon). I share the views of the hon. Member for Hodge Hill. The hon. Member for Newry and Armagh made a humorous introduction, although I do not imagine that he would expect me to agree with him about the longevity of this Parliament. We listened with great care, and we understand the seriousness of the issues that he raised. He brings wide experience of elected office, which was clear from the authority in his speech. We are grateful for the hon. Gentleman's remarks about his predecessor, James Nicholson, whose contribution the whole House welcomed and recognised. I am sure that I speak for the whole House when I say that we look forward to the hon. Gentleman's speeches.
Perhaps I might comment on the speech of my right hon. and learned Friend the Member for Dover (Mr. Rees). I am sure that my right hon. Friend the Chief Secretary joins me, having listened to that speech, in welcoming my right hon. and learned Friend's contribution. On a personal note, I should like to say how much we all recognise—especially those of us on the Government Bench—the outstanding record of service to our Government and our country that my right hon. and learned Friend has given already.
As usual, my right hon. Friend the Member for Worthing (Mr. Higgins) did an outstanding job chairing the Treasury and Civil Service Select Committee. As the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) said, my right hon. Friend gave the House the opportunity to benefit from the thorough analysis that that Select Committee brings to out debates. He gave us some bouquets this time. Those in regard to presentation were

justified. I shall not weary the House, but I took the time to look back to 1978–79 to assess the changes. I am sure that the whole House welcomes the substantial improvement in presentation.
My right hon. Friend addressed the important matter of the timing of this debate, on which I ought to take a few moments to give the Government's view. The right hon. Member for Ashton-under-Lyme and my right hon. and learned Friend the Member for Dover wondered at the suggestion in the White Paper. My right hon. Friend the Member for Worthing and the Select Committee have suggested that next year's debate on the White Paper should be deferred to late May or early June. They say that that would allow them to consider the White Paper in detail and would concentrate the debate on future years.
I am aware that the Select Committee has to complete its assessment of the White Paper in a relatively short time, although it has been helped by the further squeezing of the publication timetable this year. I fully share the objective that the debate should focus on future years, but there are factors which favour an early date. For example, I know that many hon. Members welcome the chance to discuss the Government's spending plans quite soon after they are published. There would be obvious disadvantages in a delay of nearly five months. By that time, we would already be well into the first of the three years of which the White Paper sets out forward spending plans. The detailed Supply Estimates for that year would have been presented nearly three months before the debate. There would be some danger of having the horse before the cart.
Holding the debate in June would mean that my right hon. Friend the Chancellor would not have the benefit of hon. Member's views on public expenditure when considering his Budget plans. I imagine that some hon. Members might be reluctant to miss the opportunity to make their views known at this time of the year. There is a balance of advantage to be struck, and the House and the Government should reflect carefully before concluding which arrangements would be preferable.

Mr. Higgins: I am happy, at the moment, to keep an open mind on this issue. My right hon. Friend is making his comments against the background of an autumn statement which is now much expanded in scope including the number of years that it covers. Therefore, most of what my right hon. Friend has just mentioned could adequately be discussed on the basis of the autumn statement.

Mr. Moore: My right hon. Friend the Chancellor and, indeed, the whole of the Treasury ministerial team is listening attentively to my right hon. Friend. I am sure that it will take cognisance of what he said. My right hon. Friend mentioned an item in the Financial Times which was elaborated on at some length by the hon. Member for Hodge Hill. I refer to the article by Philip Stephens. I think that an excessive amount is being read into speculative journalism these days. This is obviously the time of year when procedures for the public expenditure survey are regularly reviewed and any changes agreed. Our procedure is under way at present, and I do not think that we should pursue that any further.
Two essential issues have dominated the debate today. They related on the one hand to the quantity and on the other hand to the quality of public expenditure. Those were the two basic themes round which most of the contributions were made. If I may, I will attempt to take the House through those two areas.
I deal with the quantity debate first. Much of it dwelt on the nature of what public expenditure should be as a percentage of gross domestic product. My right hon. and learned Friend the Member for Dover expressed the position very well when describing his experiences in office. According to the earlier remarks of my right hon. Friend the Chief Secretary, the Government in chart 1.2 of volume I of the public expenditure White Paper have made their position clear. They laid out their plans for the future, they saw stable expenditure, that is expenditure decreasing not in real terms but as a percentage of GDP in the next few years, because of our success in achieving growth.
However, it was somewhat more difficult, as it has been throughout, to establish the official Opposition's position. All we can do—as opposed to some of the debates about their very large expenditure plans—is to look at the record. We have heard clear echoes of that record in some of the debates in the last few weeks. If one goes back to the period before 1974–75, the Opposition came into office in 1974 inheriting, as a percentage of GDP, a public expenditure figure of approximatley 42·5. We saw the kind of appalling explosion in expenditure that produced public expenditure of 48·5 per cent. of GDP by 1975–76. The result was not decisions taken by Her Majesty's Government, but decisions imposed upon Her Majesty's Government by the IMF, which brought the figure back to that of 1978-79–43 per cent.—the figure with which the Opposition entered office. With regard to the Opposition's record, the position is confirmed by their attitude which we have observed in so many of their commitments of late.
It is not sufficient to debate what percentage of GDP we would like to see. The question is, what is underlying the potential growth of that GDP? One does not have to look very far to see this Government's clear record. Our record in recent years had been outstanding. Gross domestic product has grown by over 3.5 per cent. in 1985, to top the Community's growth. It grew faster in that year than in the United States. It is the best annual growth rate since 1973, and—this is critical—with lower inflation, the best performance over four years since the 1973 oil shock. The economy is forecast to grow by 3 per cent. at least in 1986. It is that factor, associated with the Government's commitment on public expenditure, that makes a significant difference to the Opposition's potential.
Another question in relation to the quantity is not simply the percentage of GDP, but how it is to be financed. If the method of financing affects the quality and nature of growth, obviously the public expenditure totals will be in jeopardy. Despite any protestations to the contrary, there are essentially only three ways in which expenditure can be financed—one can tax, borrow or print. As we have heard from the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), he has clearly limited himself as to tax. He has made it clear publicly from the Dispatch Box that he would not seek to change the basic rate—at least, he would not increase it. The right hon. Gentleman must be aware by now that taxing 100 per cent. of the income of those earning above £30,000—even on the extraordinary presumption that people will continue to earn beyond £30,000—will at most, for one year, give him a total income of £1·5 billion—not the £3 billion he

thought when he first discussed the issue. The right hon. Gentleman obviously realises that he is trapped with respect to taxes.
The only presumption we can draw from the extraordinary spending programme of the right hon. Member for Sparkbrook is that there will be further borrowing or resort to the printing presses. We shall soon return in that case to the precise position we were in when, unfortunately, we had to recover from the vicissitudes of a Labour Government.
The second major theme of the debate has been the quality of expenditure. The debate took two courses—a study of the nature of what my right hon. Friend the Chief Secretary called value for money and a debate on priorities. I thought that my right hon. Friend the Chief Secretary expressed well what was meant by value of money when he talked about achieving more in goods and services for a given unit of taxpayers' money. I know that the right hon. Member for Ashton-under-Lyne as Chairman of the Public Accounts Committee, all the Committee's members, and the Government would regard that as a critical feature of the prudential use of that rare commodity, taxpayers' money.
My right hon. and learned Friend the Member for Dover and my hon. Friend the Member for Suffolk, South (Mr. Yeo) would, I know, be interested in some of the ways in which we have been able specifically to achieve efficiency gains in value for money terms. I do not know how many hon. Members have carefully studied both volumes of the Government's expenditure plans. I accept that volume II, with more than 400 pages, is a little lengthy, but I wish to draw attention to some points with respect to value for money that are critical to public expenditure. I say that as an active member, in many ways, of the Public Accounts Committee. Paragraph 22 on page 8 of volume I refers to value for money being achieved
particularly through increased competition in buying equipment. In 1984–85 27 per cent. of contracts by value were placed following competitive tender"—
an important achievement; I know of the work that the Public Accounts Committee has done—
compared with 14 per cent. in 1979–80".
That significant and important improvement will give genuine value for money.
Paragraph 33 on page 11 of volume I refers to improvements in efficiency, for example, in jobcentre services. It states:
The jobcentres are expected to place 1·9 million people in jobs in 1985–86 (compared to 1·5 million in 1981–82) at a cost per placing of £59 (£96 in 1981–82).
That is another important illustration of clear efficiency gains. Paragraph 33 continues:
In the unemployment benefit service the average ratio of claimants to staff has improved from 75:1 in 1979–80 to 119:1 in 1985–86, with a target for further improvement to 130:1 in 1988–89.
I know that such efficiency gains will be welcomed by all of us, whatever our views about the quantity of public expenditure.
Priorities were discussed a great deal. There has been some criticism in the Treasury and Civil Service Committee report and, in part, from some of my colleagues, including my hon. Friend the Member for Crawley (Mr. Soames). The right hon. Members for Sparkbrook and for Ashton-under-Lyne, my right hon.


Friend the Member for Worthing and my right hon. and learned Friend the Member for Dover covered this area of priorities.
I would like to stress two points. I wish that all hon. Members who have not had the opportunity would examine chart 111 on page 20 of volume I of the White Paper. That chart shows the significant pattern of priority changes over the period that the Government have been in office. I would gently remind the right hon. Member for Sparkbrook that he was rightly conscious of demographic changes in the health areas. That was a perfectly fair point to make. However, when examining the pattern of past, and not future, spending—though we will examine proposed future spending when appropriate—the right hon. Gentleman should realise that when it comes to the education budget there has been a fall of one third in school rolls and happily—I know that the feeling will be shared by all hon. Members—the spending per pupil has risen in real terms.

Mr. Hattersley: That depends on when the right hon. Gentleman begins his accounting. That figure is down in real terms on last year's figure.

Mr. Moore: I was trying to examine the record of the Government as a whole. It is perfectly legitimate to look at how the figures have increased over the Government's period in office. The figure in that period has increased in real terms per pupil.
There was a major debate on capital expenditure, about the way in which the Government should, in public terms, spend more on what has become a wide public debate about infrastructure. I find, and I am sure my hon. Friends also find, that the Opposition's attitude on that is quite extraordinary.
I do not know how many hon. Members were present when my right hon. Friend the Chief Secretary reminded the House earlier of the relative records of this Government and the last Labour Government. I may listen to criticism from the Conservative Benches and from some hon. Members who share no responsibility for the Labour Government's period in office, but it is extraordinary that those who were members of a Labour Government who reduced capital expenditure by 20 per cent. in real terms in their period of office should have the effrontery and gall to criticise the Government who in difficult times have maintained public capital expenditure in real terms. If one looks at the data and at the way the Labour Government reduced expenditure—

Mr. Austin Mitchell: Will the right hon. Gentleman give way?

Mr. Moore: No, I will not give way as I want to complete my point. The hon. Gentleman had more than enough opportunity, not only in the debate, in which, unfortunately he could not participate, but in his interrogation of witnesses in the Select Committee, to state his views.
I want to remind the House of the two critical areas of which we hear so much outside the House—health and roads. During Labour's period of office, capital expenditure on health and roads—

Mr. Hattersley: What does the right hon. Gentleman mean?

Mr. Moore: If the right hon. Member for Sparkbrook had been listening to me, he would know that I was

referring to remarks made earlier by my right hon. Friend the Chief Secretary, who mentioned both health and roads. I am glad that the right hon. Gentleman has taken this opportunity to catch up with the debate and that I can now continue.

Mr. Hattersley: I am sure that the right hon. Gentleman will continue.

Mr. Moore: Naturally I will continue, as the figures illustrate the essential hypocrisy of some of the arguments on this subject which occur outside the House.
During the period of the Labour Administration there was a decrease in capital expenditure on the Health Service of nearly 38 per cent. while in this Government's period of office we have increased capital expenditure by almost 11 per cent. That is a classic illustration—

Mr. Laurie Pavitt: Will the right hon. Gentleman give way?

Mr. Moore: I would like to complete my point and I will give way in a moment.
During the Labour Administration there was a decrease in public expenditure on roads of 36 per cent. and under this Government there has been an increase of 10 per cent. In the past six years there has been an expenditure increase, in real terms, on trunk roads and motorways of 25 per cent.

Mr. Pavitt: Does the right hon. Gentleman realise that the reason for the decrease of capital expenditure in 1974–75 was that the Labour Government decided to give the nurses the Halsbury award and that there was then a deliberate switch from spending on buildings to spending on people?

Mr. Moore: Not only did my right hon. Friend the Chief Secretary remind the Opposition what has been done for the nurses while this Government have been in office, but I just happen to have with me a copy of the 1979–80 Labour Government's expenditure White Paper. It shows quite clearly that throughout the period there was a year in, year out, decline in capital expenditure on the Health Service.

Mr. Pavitt: That was deliberate.

Mr. Moore: The hon. Gentleman says that was deliberate. I find great difficulty in saying anything more about that subject.

Mr. Patrick Thompson: Does my right hon. Friend agree that the reason for the large decrease in capital expenditure on the Health Service by the Labour Government was that, at that time, they had to go cap in hand to the International Monetary Fund because they had run this country into a state of bankruptcy?

Mr. Moore: My hon. Friend is right, but he is right only in terms of time. If he studies the figures he will find that, consistently throughout the Labour Government's term of office, they reduced capital expenditure on the Health Service.
My hon. Friend the Member for Bridlington (Mr. Townend) asked me about some facts that he had uncovered, he thought, about the alliance. He endeavoured to intervene in the speech of the hon. Member for Stockton, South (Mr. Wrigglesworth). The hon. Member would not give way. I had received similar


information. It is one of the matters that makes it difficult for the official Opposition and the Government to understand the facts upon which the SDP and the Liberals base their arguments.
I have had a letter sent to me by a friend. I do not know how many hon. Members have seen it. It has been delivered throughout the country during February and it is from the right hon. Member for Plymouth, Devonport (Dr. Owen). The letter has the title;
Mrs. Thatcher and Mr. Kinnock do not want you to see this letter
The letter talks about:
The frightening facts of our economic collapse.
Facts? Let me just draw to the attention of the House one or two of the facts from which the public is supposed to be learning about the economic policies of a not very present alliance. The facts are:
the UK's share of world trade"—
I am told in the letter, has declined from 17·2 per cent. to 8·6 per cent. Fact—in 1980, it was 9·7 per cent. as opposed to 17·2 per cent. The letter is relatively demeaning to the United Kingdom. We are told:
we are in the third division"—
that is a point about which my hon. Friend the Member for Bridlington asked tonight—
with Hong Kong, Puerto Rico, the USSR, Yugoslavia and Taiwan.
We are told that the United Kingdom's GNP per head—it was repeated in the debate—is below that of Italy.
I did my best to try to establish the facts upon which the alliance argument was based. The data are all in the "World Bank Year Book 1985", the World Bank's latest year book. It shows that, as opposed to the $5,735 shown in the alliance letter, in the United Kingdom it is in fact $9,200. In addition, Puerto Rico is shown as having a GNP per head of $5,004. It is, in fact, $2,500. Those are the facts upon which economic debate is supposed to take place.
I could give many more illustrations, which are critical to the debate. I have listened to a serious Opposition—

Mr. Dalyell: rose—

Mr. Moore: I shall give way to the hon. Gentleman in a moment. The interesting letter which is addressed to those people who might support either of the main parties in the House states that the Government have been making it systematically
more difficult for the business community to keep people in work. Employers' national insurance payments now represent a bigger portion of the economy than before the Conservatives gained power.
Facts? The SDP and the Liberal party seem to have forgotten that the national insurance surcharge has been abolished. The proportion of GDP represented by employers' NIC has fallen, not increased, from 4·8 per cent. in 1978–79 to 3·5 per cent. in 1985–86. Those are the facts.
I am also told in the same letter, which has been circulated to many of our constituents:
The tax burden on corporate income
has gone up as a proportion of GDP. Corporation tax on non-North sea companies fell during the period from 2·2 per cent. of GDP in 1978–79 to 2·1 per cent. I gather that the SDP and the Liberal party think that we should not take account of the North sea. That makes it difficult for those

of us who come to these debates and try, as I have, to consider the debate from the Opposition's point of view in terms of the quantity and quality of public expenditure to listen to contributions from the alliance below the Gangway.

Mr. Dalyell: Four of us, two from the Opposition and two Conservative Members, have made serious speeches about the science budget in a non-partisan manner. How does the Minister reply to the Science and Engineering Research Council and the grave worries of the Medical Research Council and other scientists?

Mr. Moore: I am endeavouring to proceed. There was an extraordinary amendment on the Order Paper put down by the alliance—although it was not called by Mr. Speaker—which seems to suggest that it had an interest and a role in this debate. I am having difficulty correlating that with the information I have been given.
The right hon. Member for Sparkbrook asked an important question about ECGD credit. I entirely accept that some of the tables and charts in the bound text are rather difficult to get to grips with, but it is an important issue for all of us. I hope that the right hon. Gentleman will not mind if I put the record straight. He referred to what he saw as a 75 per cent. reduction in the provisions for ECGD credit under support costs. I can understand why he should misinterpret that as a lessening of support for our exporters.
It is important to put on record that the White Paper made it clear that the value of export business being supported will remain at around £3 billion a year over the next three years. It shows that the pattern of support has not changed. The cost of interest support reflects the difference between the market rate and the fixed rate set under the international consensus. Since 1981 the measures agreed with trading partners have brought consensus rates more into line with the market rates. As the volume of business at the old consensus rate is replaced by new business the cost of interest support will fall. That is a phenomenon that is occurring with our competitors, too.
I think that it is important, as the autumn statement made clear, that the provision for export support was raised by £200 million a year. We have recently introduced a new soft loan facility under the Aid and Trade Provision. Essentially, the basic provision in terms of the quantity of export is unchanged. I know that the right hon. Gentleman will want to re-examine that because I do not think that he will disagree with it.
The right hon. Gentleman raised the issue, as he has before, of the cost of unemployment. The right hon. Gentleman told us last week that unemployment cost the country between £21$5 billion and £24 billion a year. As he knows, we regard such figures as bogus. We know from the White Paper that social security benefits, which he referred to tonight, paid to the unemployed are expected to total around £6·75 billion in 1986–87. However, as he knows, there is no easy route back to zero unemployment. One cannot know how much even of that sum is an avoidable cost to the public purse. Calculations giving even bigger numbers purporting to take account of tax receipts forgone are equally bogus. It is impossible to say what public finances would look like if somehow unemployment were to be eliminated.
Of course, the right hon. Gentleman's purpose in inflating the figures is to create the illusion that this is the


source from which Labour's grandiose spending plan—we still have not had any response to the detailed points my right hon. Friend the Chief Secretary made earlier in the debate —can be financed. A moment's reflection will show just how fanciful that is. The right hon. Member for Sparkbrook told us on the radio last Sunday that he hoped to reduce unemployment by 1 million. The White Paper tells us that that will save him expenditure of £2 billion. That is not going far towards his £24 billion bill for Labour's programme. He will have to find another £22 billion elsewhere and that is before the cost of renationalisation, as my right hon. Friend the Chief Secretary said tonight.
The hon. Member for Linlithgow (Mr. Dalyell) and my hon. Friend the Member for Crawley raised questions concerning the science research budget, and I shall consider them carefully. I shall also consider the points on which the hon. Member for Linlithgow asked for detailed answers, as he always does. I believe that he was fair in making some of those points. However, in the last survey we increased the priority for science. An extra £15 million was spent on the science budget, to be used selectively, on advice from the Advisory Board for the Research Councils to nurture the growth points in research and to get better value for money. The hon. Gentleman was fair enough to recognise that. The universities received an additional £9 million, partly to provide extra equipment to strengthen the research base. The hon. Gentleman made an important point and my hon. Friend the Member for Crawley made a good speech.
We transferred resources from other programmes to fund a further 5,000 higher education places on high-tech courses under the engineering and technology programme. The research councils are continuing to develop relations with industry, and to encourage financial associations with the private sector—[Interruption.] I am trying to respond to the important speech of the hon. Member for Linlithgow. I shall pursue his points beyond the debate, but I hope that my comments have been helpful to him.
The hon. Member for Wolverhampton, North-East (Mrs. Short) raised many detailed points, and no doubt she will pursue her questions on health and social security when the departmental Select Committee takes evidence. I shall not attempt to give a complete list of answers tonight. However, I stress the priority that the Government have given to the Health Service. The White Paper provides an additional £320 million for health and personal social services in 1986–87. Efficiency savings are being achieved so that extra services are being provided. Between 1978 and 1984 in-patient and day-care cases rose by 1 million, and out-patient cases by 3 million. I shall ensure that the hon. Lady's detailed points about that part of the budget are drawn to the attention of my right hon. Friend the Secretary of State for Social Services.
I was asked why the level of aid and assistance in Northern Ireland was higher than in other parts of the United Kingdom. The unemployment level of 21 per cent. in Northern Ireland is higher than the average for the rest of the United Kingdom. Therefore, it is not surprising that the per capita spending to support employment is higher. It is even less surprising that per capita spending on law and order is higher.
I have now covered all the points raised in the debate—[Interruption.] I appreciate the help of the right hon. Member for Sparkbrook. Perhaps he would like to extend his help specifically to answer the question of my right

hon. Friend the Chief Secretary. [Interruption.] There is plenty of time. When the hon. Member for Hodge. Hill gave an additional seven minutes to the debate, he sought to ensure that his hon. Friend had the opportunity to intervene. My right hon. Friend the Chief Secretary gave the Opposition the opportunity to explain how they would finance the £24 billion annual expenditure programme, to which they are committed. At the most conservative estimate, that would increase VAT to 41 per cent. a year. But the Opposition completely failed to answer his question. I am happy to continue to consider the detailed commitments of the Opposition regarding maternity and death grants, child benefit, pensions, early retirement and unemployment benefit.
For more than 30 years the state's appetite for the nation's wealth has grown and grown. The Government are now bringing that appetite under control, thereby curbing inflation, and giving the power to choose back to individual people. Public spending is on target and will remain stable in real terms. Thus, as the nation's income continues to rise, the proportion taken by the state will continue to fall. Public expenditure under these plans will take the smallest proportion of GDP since 1972–73.
That is why I urge my right hon. and hon. Friends to reject the Opposition amendment.

Question put, That the amendment be made:—

The House divided: Ayes 186, Noes 345.

Division No. 83]
[10.00 pm


AYES


Adams, Allen (Paisley N)
Crowther, Stan


Alton, David
Cunliffe, Lawrence


Archer, Rt Hon Peter
Cunningham, Dr John


Ashley, Rt Hon Jack
Dalyell, Tam


Ashton, Joe
Davies, Rt Hon Denzil (L'lli)


Atkinson, N. (Tottenham)
Davis, Terry (B'ham, H'ge H'l)


Bagier, Gordon A. T.
Dewar, Donald


Barron, Kevin
Dixon, Donald


Beckett, Mrs Margaret
Dobson, Frank


Benn, Rt Hon Tony
Dormand, Jack


Bennett, A. (Dent'n &amp; Red'sh)
Douglas, Dick


Bermingham, Gerald
Dubs, Alfred


Bidwell, Sydney
Duffy, A. E. P.


Blair, Anthony
Dunwoody, Hon Mrs G.


Boothroyd, Miss Betty
Eadie, Alex


Boyes, Roland
Eastham, Ken


Bray, Dr Jeremy
Edwards, Bob (W h'mpt'n SE)


Brown, Gordon (D'f'mline E)
Evans, John (St. Helens N)


Brown, Hugh D. (Provan)
Ewing, Harry


Brown, N. (N'c'tle-u-Tyne E)
Fatchett, Derek


Brown, R. (N'c'tle-u-Tyne N)
Faulds, Andrew


Brown, Ron (E'burgh, Leith)
Field, Frank (Birkenhead)


Caborn, Richard
Fields, T. (L'pool Broad Gn)


Callaghan, Jim (Heyw'd &amp; M)
Fisher, Mark


Campbell, Ian
Flannery, Martin


Campbell-Savours, Dale
Forrester, John


Canavan, Dennis
Foster, Derek


Carter-Jones, Lewis
Foulkes, George


Cartwright, John
Fraser, J. (Norwood)


Clark, Dr David (S Shields)
Freeson, Rt Hon Reginald


Clarke, Thomas
Garrett, W. E.


Clay, Robert
George, Bruce


Clelland, David Gordon
Gilbert, Rt Hon Dr John


Clwyd, Mrs Ann
Godman, Dr Norman


Cocks, Rt Hon M. (Bristol S)
Gould, Bryan


Cohen, Harry
Hamilton, James (M'well N)


Coleman, Donald
Hamilton, W. W. (Fife Central)


Conlan, Bernard
Hancock, Michael


Cook, Frank (Stockton North)
Hardy, Peter


Cook, Robin F. (Livingston)
Harman, Ms Harriet


Corbett, Robin
Harrison, Rt Hon Walter


Corbyn, Jeremy
Hattersley, Rt Hon Roy


Cox, Thomas (Tooting)
Haynes, Frank


Craigen, J. M.
Healey, Rt Hon Denis






Heffer, Eric S.
Pavitt, Laurie


Hogg, N. (C'nauld &amp; Kilsyth)
Pendry, Tom


Holland, Stuart (Vauxhall)
Pike, Peter


Howells, Geraint
Powell, Raymond (Ogmore)


Hughes, Robert (Aberdeen N)
Prescott, John


Hughes, Roy (Newport East)
Radice, Giles


Hughes, Sean (Knowsley S)
Randall, Stuart


Hughes, Simon (Southwark)
Redmond, Martin


Hume, John
Rees, Rt Hon M. (Leeds S)


John, Brynmor
Richardson, Ms Jo


Jones, Barry (Alyn &amp; Deeside)
Roberts, Allan (Bootle)


Kaufman, Rt Hon Gerald
Roberts, Ernest (Hackney N)


Kennedy, Charles
Robertson, George


Kirkwood, Archy
Robinson, G. (Coventry NW)


Lamond, James
Rooker, J. W.


Leadbitter, Ted
Rowlands, Ted


Leighton, Ronald
Ryman, John


Lewis, Ron (Carlisle)
Sedgemore, Brian


Lewis, Terence (Worsley)
Sheerman, Barry


Litherland, Robert
Sheldon, Rt Hon R.


Lloyd, Tony (Stretford)
Shore, Rt Hon Peter


Lofthouse, Geoffrey
Short, Ms Clare (Ladywood)


McCartney, Hugh
Short, Mrs R.(W'hampt'n NE)


McDonald, Dr Oonagh
Skinner, Dennis


McKelvey, William
Smith, C.(Isl'ton S &amp; F'bury)


MacKenzie, Rt Hon Gregor
Smith, Rt Hon J. (M'ds E)


Maclennan, Robert
Snape, Peter


McNamara, Kevin
Soley, Clive


McTaggart, Robert
Spearing, Nigel


McWilliam, John
Steel, Rt Hon David


Madden, Max
Stewart, Rt Hon D. (W Isles)


Marek, Dr John
Stott, Roger


Marshall, David (Shettleston)
Strang, Gavin


Martin, Michael
Straw, Jack


Maxton, John
Thomas, Dafydd (Merioneth)


Maynard, Miss Joan
Thompson, J. (Wansbeck)


Meacher, Michael
Tinn, James


Michie, William
Torney, Tom


Mikardo, Ian
Wallace, James


Millan, Rt Hon Bruce
Wardell, Gareth (Gower)


Miller, Dr M. S. (E Kilbride)
Wareing, Robert


Mitchell, Austin (G't Grimsby)
Weetch, Ken


Morris, Rt Hon A. (W'shawe)
Welsh, Michael


Nellist, David
Williams, Rt Hon A.


Oakes, Rt Hon Gordon
Winnick, David


O'Brien, William
Woodall, Alec


O'Neill, Martin
Wrigglesworth, Ian


Owen, Rt Hon Dr David



Park, George
Tellers for the Ayes:


Parry, Robert
Mr. Ron Davies and


Patchett, Terry
Mr. Allen McKay.




NOES


Adley, Robert
Bottomley, Mrs Virginia


Alexander, Richard
Bowden, A. (Brighton K'to'n)


Alison, Rt Hon Michael
Bowden, Gerald (Dulwich)


Amess, David
Boyson, Dr Rhodes


Ancram, Michael
Brandon-Bravo, Martin


Arnold, Tom
Bright, Graham


Aspinwall, Jack
Brinton, Tim


Atkins, Rt Hon Sir H.
Brittan, Rt Hon Leon


Atkins, Robert (South Ribble)
Brooke, Hon Peter


Atkinson, David (B'm'th E)
Brown, M. (Brigg &amp; Cl'thpes)


Baker, Rt Hon K. (Mole Vall'y)
Bruinvels, Peter


Baker, Nicholas (Dorset N)
Bryan, Sir Paul


Baldry, Tony
Buchanan-Smith, Rt Hon A.


Banks, Robert (Harrogate)
Buck, Sir Antony


Batiste, Spencer
Bulmer, Esmond


Bellingham, Henry
Burt, Alistair


Bendall, Vivian
Butcher, John


Benyon, William
Butler, Rt Hon Sir Adam


Best, Keith
Butterfill, John


Bevan, David Gilroy
Carlisle, John (Luton N)


Biffen, Rt Hon John
Carlisle, Kenneth (Lincoln)


Biggs-Davison, Sir John
Carlisle, Rt Hon M. (W'ton S)


Blackburn, John
Carttiss, Michael


Blaker, Rt Hon Sir Peter
Cash, William


Body, Sir Richard
Channon, Rt Hon Paul


Bonsor, Sir Nicholas
Chapman, Sydney


Bottomley, Peter
Chope, Christopher





Churchill, W. S.
Hickmet, Richard


Clark, Hon A. (Plym'th S'n)
Hicks, Robert


Clark, Dr Michael (Rochford)
Higgins, Rt Hon Terence L.


Clark, Sir W. (Croydon S)
Hind, Kenneth


Clarke, Rt Hon K. (Rushcliffe)
Hirst, Michael


Cockeram, Eric
Hogg, Hon Douglas (Gr'th'm)


Colvin, Michael
Holland, Sir Philip (Gedling)


Conway, Derek
Holt, Richard


Coombs, Simon
Hordern, Sir Peter


Cormack, Patrick
Howard, Michael


Corrie, John
Howarth, Alan (Stratf'd-on-A)


Couchman, James
Howarth, Gerald (Cannock)


Crouch, David
Howell, Rt Hon D. (G'ldford)


Currie, Mrs Edwina
Howell, Ralph (Norfolk, N)


Dickens, Geoffrey
Hubbard-Miles, Peter


Dorrell, Stephen
Hunt, David (Wirral W)


Dover, Den
Hunt, John (Ravensbourne)


du Cann, Rt Hon Sir Edward
Hunter, Andrew


Dunn, Robert
Hurd, Rt Hon Douglas


Durant, Tony
Irving, Charles


Dykes, Hugh
Jackson, Robert


Edwards, Rt Hon N. (P'broke)
Jenkin, Rt Hon Patrick


Emery, Sir Peter
Jessel, Toby


Evennett, David
Johnson Smith, Sir Geoffrey


Eyre, Sir Reginald
Jones, Gwilym (Cardiff N)


Fairbairn, Nicholas
Jones, Robert (Herts W)


Fallon, Michael
Jopling, Rt Hon Michael


Farr, Sir John
Joseph, Rt Hon Sir Keith


Favell, Anthony
Kellett-Bowman, Mrs Elaine


Fenner, Mrs Peggy
Kershaw, Sir Anthony


Finsberg, Sir Geoffrey
Key, Robert


Fletcher, Alexander
King, Roger (B'ham N'field)


Fookes, Miss Janet
King, Rt Hon Tom


Forman, Nigel
Knight, Greg (Derby N)


Forsyth, Michael (Stirling)
Knowles, Michael


Forth, Eric
Knox, David


Fowler, Rt Hon Norman
Lamont, Norman


Fox, Marcus
Latham, Michael


Franks, Cecil
Lawrence, Ivan


Fraser, Peter (Angus East)
Lawson, Rt Hon Nigel


Freeman, Roger
Lee, John (Pendle)


Fry, Peter
Leigh, Edward (Gainsbor'gh)


Gale, Roger
Lennox-Boyd, Hon Mark


Galley, Roy
Lester, Jim


Gardiner, George (Reigate)
Lightbown, David


Gardner, Sir Edward (Fylde)
Lilley, Peter


Garel-Jones, Tristan
Lloyd, Ian (Havant)


Gilmour, Rt Hon Sir Ian
Lloyd, Peter (Fareham)


Glyn, Dr Alan
Lord, Michael


Goodhart, Sir Philip
Luce, Rt Hon Richard


Goodlad, Alastair
Lyell, Nicholas


Gorst, John
McCrindle, Robert


Gower, Sir Raymond
McCurley, Mrs Anna


Grant, Sir Anthony
Macfarlane, Neil


Greenway, Harry
MacGregor, Rt Hon John


Gregory, Conal
MacKay, Andrew (Berkshire)


Griffiths, Sir Eldon
MacKay, John (Argyll &amp; Bute)


Griffiths, Peter (Portsm'th N)
Maclean, David John


Grist, Ian
McNair-Wilson, P. (New F'st)


Ground, Patrick
Madel, David


Gummer, Rt Hon John S
Major, John


Hamilton, Hon A. (Epsom)
Malins, Humfrey


Hamilton, Neil (Tatton)
Malone, Gerald


Hampson, Dr Keith
Maples, John


Hanley, Jeremy
Marland, Paul


Hannam, John
Marlow, Antony


Hargreaves, Kenneth
Mates, Michael


Harris, David
Maude, Hon Francis


Harvey, Robert
Mawhinney, Dr Brian


Haselhurst, Alan
Maxwell-Hyslop, Robin


Hawkins, C. (High Peak)
Mayhew, Sir Patrick


Hawkins, Sir Paul (N'folk SW)
Mellor, David


Hawksley, Warren
Merchant, Piers


Hayes, J.
Meyer, Sir Anthony


Hayhoe, Rt Hon Barney
Miller, Hal (B'grove)


Hayward, Robert
Mills, Iain (Meriden)


Heath, Rt Hon Edward
Miscampbell, Norman


Heddle, John
Mitchell, David (Hants NW)


Henderson, Barry
Moate, Roger


Heseltine, Rt Hon Michael
Monro, Sir Hector






Montgomery, Sir Fergus
Speller, Tony


Moore, Rt Hon John
Spencer, Derek


Morrison, Hon C. (Devizes)
Spicer, Jim (Dorset W)


Morrison, Hon P. (Chester)
Spicer, Michael (S Worcs)


Moynihan, Hon C.
Squire, Robin


Mudd, David
Stanbrook, Ivor


Murphy, Christopher
Stanley, Rt Hon John


Neale, Gerrard
Steen, Anthony


Nelson, Anthony
Stern, Michael


Neubert, Michael
Stevens, Lewis (Nuneaton)


Newton, Tony
Stewart, Allan (Eastwood)


Nicholls, Patrick
Stewart, Andrew (Sherwood)


Norris, Steven
Stewart, Ian (Hertf'dshire N)


Oppenheim, Phillip
Stokes, John


Oppenheim, Rt Hon Mrs S.
Stradling Thomas, Sir John


Osborn, Sir John
Sumberg, David


Ottaway, Richard
Tapsell, Sir Peter


Page, Richard (Herts SW)
Taylor, John (Solihull)


Parkinson, Rt Hon Cecil
Taylor, Teddy (S'end E)


Parris, Matthew
Tebbit, Rt Hon Norman


Patten, Christopher (Bath)
Temple-Morris, Peter


Patten, J. (Oxf W &amp; Abgdn)
Terlezki, Stefan


Pattie, Geoffrey
Thatcher, Rt Hon Mrs M.


Pawsey, James
Thomas, Rt Hon Peter


Peacock, Mrs Elizabeth
Thompson, Donald (Calder V)


Percival, Rt Hon Sir Ian
Thompson, Patrick (N'ich N)


Pollock, Alexander
Thorne, Neil (Ilford S)


Porter, Barry
Thornton, Malcolm


Portillo, Michael
Townend, John (Bridlington)


Powell, William (Corby)
Townsend, Cyril D. (B'heath)


Powley, John
Tracey, Richard


Prentice, Rt Hon Reg
Trippier, David


Price, Sir David
Trotter, Neville


Prior, Rt Hon James
Twinn, Dr Ian


Proctor, K. Harvey
van Straubenzee, Sir W.


Pym, Rt Hon Francis
Vaughan, Sir Gerard


Raffan, Keith
Viggers, Peter


Raison, Rt Hon Timothy
Waddington, David


Rathbone, Tim
Wakeham, Rt Hon John


Rees, Rt Hon Peter (Dover)
Waldegrave, Hon William


Renton, Tim
Walker, Bill (T'side N)


Rhodes James, Robert
Wall, Sir Patrick


Rhys Williams, Sir Brandon
Waller, Gary


Ridley, Rt Hon Nicholas
Walters, Dennis


Ridsdale, Sir Julian
Ward, John


Rippon, Rt Hon Geoffrey
Wardle, C. (Bexhill)


Roe, Mrs Marion
Warren, Kenneth


Rost, Peter
Watson, John


Rumbold, Mrs Angela
Watts, John


Ryder, Richard
Wells, Bowen (Hertford)


Sackville, Hon Thomas
Wells, Sir John (Maidstone)


Sainsbury, Hon Timothy
Wheeler, John


St. John-Stevas, Rt Hon N.
Whitfield, John


Sayeed, Jonathan
Whitney, Raymond


Scott, Nicholas
Wiggin, Jerry


Shaw, Giles (Pudsey)
Wilkinson, John


Shaw, Sir Michael (Scarb')
Winterton, Nicholas


Shelton, William (Streatham)
Wolfson, Mark


Shepherd, Colin (Hereford)
Wood, Timothy


Shepherd, Richard (Aldridge)
Woodcock, Michael


Shersby, Michael
Yeo, Tim


Silvester, Fred
Young, Sir George (Acton)


Sims, Roger
Younger, Rt Hon George


Skeet, Sir Trevor



Smith, Sir Dudley (Warwick)
Tellers for the Noes:


Smith, Tim (Beaconsfield)
Mr. Carol Mather and


Soames, Hon Nicholas
Mr. Robert Boscawen.


Speed, Keith

Question accordingly negatived.

Main Question put and agreed to.

Resolved,
That this House takes note of the White Paper on the Government's Expenditure Plans 1986–87 to 1988–89 (Cmnd. 9702).

Police Federations (Public Statements)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sainsbury.]

Sir Eldon Griffiths: On 14 January an assistant chief constable of Northern Ireland handed to the chairman of the Police Federation of Northern Ireland a paper of which I have a copy and which stated that regulation 35 of the Royal Ulster Constabulary's code had unilaterally been amended by his chief constable, Sir John Hermon. Regulation 35 read:
Nothing in these regulations will preclude the spokesmen of any of the constituent sections of the Police Association for Northern Ireland making or issuing any statement for the news media concerning the welfare and efficiency of their members.
These words are incapable of any other meaning than that the spokesman of the Police Federation, the principal element of the Police Association, is free to speak out on all matters affecting the welfare and efficiency of its members, as Parliament intended when it passed the parent Act. However, the amendment, which was made without one word of consultation or explanation substituted the following words:
Statements and interviews and the publication of articles in any journal or periodical concerning matters of general force policy and actions or expressions of opinion on police problems or duties are not permitted without the express consent or approval of the chief constable.
The amendment continued:
Where any aspect of welfare or efficiency may relate to force policy or actions, police problems or duties, the chief constable should be consulted and his approval obtained before any statement is made or any article published.
These words have no other meaning than that the chief constable has decided to prevent the federation making any comment in public of which he has not specifically approved in advance.
Over the following weekend the chief constable went further. He withdrew the amendment which I have quoted and substituted for it a further force order cancelling regulation 35—the federation's free—speech regulation—in its entirety. The exact words of the order were:
Regulation 35 is cancelled pending consideration of an amending regulation.
Those are the origins of the damaging and unnecessary dispute that is upsetting the Royal Ulster Constabulary and giving aid and comfort to its enemies. It is the issue which is now, quite properly, engaging the attention of the House.
I approach this matter far more in sorrow than in anger. I have sought to drain my words of any emotional content. I have been personally involved in policing matters for close on 16 years but never before have I encountered an issue that raised such fundamental principles of British justice as this one, and the principle need to be spelt out clearly.
The first issue is free speech and the second is the duty on all citizens—and most of all on chief constables of police—to respect the letter and spirit of the law as Parliament makes it. The third issue is the practical need to bring this distressing and undignified quarrel swiftly to an end with no further damage and before it gets out of hand. What has upset the chief constable? According to his senior assistant chief constable, it was an editorial in the Federation magazine, "Police Beat". It said:
the Federation sees the RUC as an essentially civilian force temporarily armed for its own protection while the troubles


endure. Fighting a guerilla war is no job for an ordinary police officer. It is the job of the military to seek out and destroy the enemy and to provide a secure environment for the operation of the traditional law enforcement agency.
Those, apparently, are the alleged offending words.
I say to my hon. Friend the Parliamentary Under-Secretary of State for Northern Ireland that this is milk and water stuff compared with the full-blooded editorials that come thundering out of the England and Wales Federation magazine on every issue imaginable from the ineffectiveness of the machine guns issued to the police at London airport to the conduct of senior officers during racial disturbances and riots. The editorial does nothing more than reiterate the official and publicly declared policy of the Federation for the past 17 years, as agreed at its democratically elected annual conference. In evidence given to the Hunt Committee in 1969, the Federation used and published a statement of policy in almost precisely the same words as those objected to.
Why is it that the chief constable takes exception in 1986 to a statement that the Federation has repeatedly made in 1976, 1978, 1983, 1984 and 1985? What is it in these words that can justify the chief constable coming down, like a ton of bricks, and unilaterally washing out the entire regulation that guarantees the Federation's right to speak out? What is wrong with the Federation putting forward its belief that, sooner or later, the Royal Ulster Constabulary should return to unarmed, civilian, policing? Is this not what we all want? Is it not the Government's long term hope and policy?
Let us suppose that the chief constable had other motives and that he was determined for other reasons to slap down the Federation and to discipline Mr. Alan Wright. The chief constable has tried to do this several times before. The police discipline code, as I know from too much experience, is an all-embracing document. If the chief constable believes that Mr. Wright is in breach of it, why does he not charge him with an offence? He could do so, for example, under the regulation dealing with
bringing the service into disrepute
or in the catch-all phrase "disreputable conduct."
I am the first to accept that, in any disciplined force, the chief constable must have the ability to charge and try, and, if a man is found guilty, to punish any of his officers who break the discipline code. That is the proper remedy, but is it not the proper remedy for the chief constable to respond to what he considers to be Mr. Wright's error of judgment by abrogating all the Federation's statutory rights. This is the heart of the matter.
The rights and the duties of the Federation belong to all its members—past, present and future. They are collective rights, created by this House; and they cannot be taken away from all the members of the Federation because one member is thought by the chief constable to have stepped out of line. If, against all the evidence, the chief constable believes that Mr. Wright is guilty of any offence, let the chief constable bring charges against him. If he does this, Mr. Wright will be entitled to be informed—which he has not been—of the complaints that are laid against him; to be allowed—as he has not been—to confront his accuser and to be given a fair hearing—again he has not been—in accordance with the proper procedures of the police discipline regulations as laid down by this House.
I do not think that there is a cat in hell's chance of Mr. Wright's being found guilty of any offence in any court that I can imagine. However let us suppose that he was. Would that in any way justify the chief constable's taking away the rights of the other 10,999 RUC police officers and reservists who, by statute, have been given the right, through their Federation, to make representations on any matter concerning their welfare and efficiency? Could one man's error of judgment have justified the imposing of collective punishment on every other member of the force?
The chief constable cannot, and he must not seek to be the arbiter of what another statutory body—the Police Federation—may or may not do in its collective wisdom within the purview of the responsibilities laid upon it by an Act of Parliament. He has no lawful authority to cancel the Federation's right to make representations on welfare and efficiency. He has no business to fly in the face of the will of the House, only so recently restated when all parties acceded to the recommendation of the Edmund Davies Royal Commission, that in matters of welfare and efficiency, the Police Federation enjoys and exercises the freedom to represent its members' view in public.
The central question is what is to be done to put an end to this unseemly quarrel. The short answer is that the chief constable must withdraw his force order. Nothing less will do, for if the order were to be allowed to stand, a number of serious consequences would flow from it. First, free speech would be suppressed—the federation would be both censored and gagged. Secondly, the will of Parliament would be denied. Thirdly, the chief constable's own authority in his own force would be impaired, for the federation has no choice but to continue to exercise its statutory right to speak out in defiance of the Chief Constable's order, and that can do no good to anybody.
There are wider dangers. This action in Ulster, I regret to say, poses a threat to the Police Federations of England and Wales, and of Scotland, which for years have exercised their undoubted right to make representations in public on all matters that affect the welfare and efficiency of their forces. Therefore, I must, with a heavy heart, advise my hon. Friend the Minister, and, through him, my right hon. Friend the Secretary of State, that on this issue the Northern Ireland Police Federation can count on the total support of the Police Federation of England and Wales, the Police Federation of Scotland—mark this well—the Association of Garda Inspectors and Sergeants in the Irish Republic, and of the 500,000-strong International Union of Police Staff Associations. The president of the IUPSA representing police officers in all of western Europe, has already offered to join the chairmen of all the British Police Federations in defending the rights of the Northern Ireland Police Federation.
In short, this affair has all the makings of one of those issues that seem at first to be no more than a minor struggle but which, because of the high principles involved, can easily plunge the Government into a major conflict of principle with the whole of the British police service, not to speak of the European force.
A wise Minister, and I am sure that my hon. Friend wants to be wise in this matter, will do his best, as I am doing, to de-fuse the problem before it gets out of hand. I ask the Minister not to do two things. First, let him not take refuge in dark hints about the Special Branch or the intelligence service reporting to the chief constable that Mr. Wright's observations have assisted the IRA. I have


reason to believe that the material the chief constable says he has received to support that view falls a long way short of sustaining any such argument.
Of course, the IRA's propagandists will seek to turn to their own advantage anything and everything that is said by anyone, but I am quite sure that my hon. Friend is wise and realises that most operational officers in the Special Branch are also members of the police federation. They, too, have an interest in ensuring that the police federation in Northern Ireland is not gagged.
I will say no more about that, because my hon. Friend knows perfectly well what lies behind those remarks. Let him not rely on publishable reports about the federation's comments, for if patriotism, as is sometimes claimed, is the last refuge of the scoundrel, so, too, if I may speak from experience, can chief constables who are in difficulty reach out for Special Branch reports that they know need not be revealed and use them as an excuse for unjust actions.
The second thing I hope my hon. Friend will not do is to attack Mr. Wright. I know how easy it is for hard-pressed Ministers who are seeking a way out of a political impasse that, heaven knows, is not of their making, to try to put the blame on those who do not fall in with their own ideas of compromise. Words like "stubborn" and "unreasonable" all too easily come tumbling out of ministerial mouths when Ministers find themselves face to face with a representative body that has its back to the wall and is determined, as the federation is determined, not to yeild on a fundamental issue of principle.
The Minister's duty, as I see it, is to safeguard the broader national interest and the longer-term relationship between the Government and the representative bodies of all the police federations on this side of the water as well as in Northern Ireland. I respectfully urge him to think carefully before using any words that might be construed as an attack on a body set up by Parliament to represent the 11,000 men and women of the RUC and its reservists. What I am asking the Minister to do is simple. First, let him give a clear commitment to carry out the will of Parliament. This House gave the police federations the right to make representations on behalf of their members and I ask the Minister publicly to acknowledge that. I hope that he will make clear that the Government are bound and will honour, as the chief constable is bound and should honour, both the letter and the spirit of section 17 of the Police Act (Northern Ireland) 1970.
Second, I ask the Minister to have another word with Sir John Hermon. Let the Minister explain to the chief constable that he will do himself nothing but good if he admits that he has made a mistake. We all make mistakes and it is a characteristic of this House and of the British people that we rarely gloat—on the contrary, we cheer—when a man freely and openly admits that he may have been wrong. The federation did not seek and does not want this damaging fight, and the way to peace between the federation and the chief constable, who I am bound to say precipitated this conflict, is for Sir John to withdraw his order. I hope that he will do that, for if he does not I rear deeply for the well-being of the RUC.

Mr. Kevin McNamara: I am grateful to the Minister for allowing me a few minutes on this important matter. Rarely has an hon. Member made a more disgraceful attack on the role of the

Government and of the police in an Adjournment debate than has the hon. Member for Bury St. Edmunds (Sir E. Griffiths) tonight.
I read in the newspaper this morning that:
It was unfair to expect the RUC to impose the Anglo-Irish Agreement when it was opposed by the majority of people in Northern Ireland, the chairman of the Northern Ireland Police Federation, Mr. Alan Wright, said on a BBC television programme broadcast last night.
The hon. Member for Bury St. Edmunds, a paid representative of the Police Federation, has come here expecting us to oppose the spirit of policies passed by Parliament. That is a most atrocious thing. If ever there was a justification for chief constables' orders—I have in the past been highly critical of the chief constable of the RUC—this is it. It is disgraceful to criticise that policy and to have unnamed members of the RUC, backed by Mr. Wright, going on television and saying:
We have our Government, deciding in Parliament that there will be an agreement between two sovereign states. It has been demonstrated here that the majority of the law-abiding citizens in Northern Ireland are opposed to it. Now we are caught in the middle of being seen to try and impose an agreement which the large majority of people here don't want. Now that is not a fair position really to put the police into.
I never heard the hon. Gentleman say that throughout the miners' strike when the people of south Yorkshire wanted nothing to do with policy. The hon. Gentleman then talked of upholding the law, upholding the spirit of what the House had passed, the will of the sovereign Parliament, the legislation that had been carried. Tonight, however, the hon. Gentleman comes here and talks about supporting a leader of a Police Federation who goes on television and completely undermines the policies of Her Majesty's Government, the majority in this House, and the majority in the Republic, who aids and succours not reports from the special branch about the IRA but the paramilitaries and the gentlemen who used to sit on this Bench but who are not prepared to accept the majority will of Parliament in which they claim that they should have representation.
The hon. Gentleman, for whom I once had a high regard, should think very carefully about the case that he is advancing. It is an absolute disgrace to him. To bring in the rest of the Police Federation of these islands in this way is absolutely disgusting.

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Nicholas Scott): My hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths), who has great knowledge in these matters, set out three priorities. His third priority is my first—it is to try to bring the difference of opinion between the chief constable of the RUC and the Police Federation to a speedy and amicable close.
A great deal of work has been put in by the Police Authority for Northern Ireland to achieve a speedy and amicable solution. I have spoken to the Police Authority, the chief constable, and to representatives of the Police Federation for Northern Ireland to try to resolve the matter. By the time of this debate, it has not been possible to achieve that.
Despite the terms in which my hon. Friend raised the debate, if he will be fair, he will recognise that, whereas the federation has an unfettered right to talk about matters concerning the welfare and efficiency of the force, the


chief constable must be responsible for the operational activities of the RUC, and it can only be the chief constable who decides where they overlap.

Sir Eldon Griffiths: No.

Mr. Scott: Well, my hon. Friend may disagree.

Sir Eldon Griffiths: Of course.

Mr. Scott: Perhaps my hon. Friend will listen for a moment while I develop the argument. The circumstances of Northern Ireland as they are and have been for the past 16 years and the efforts and sacrifices of the RUC and its members must cry out for an early and amicable solution of this question. Nobody wants it to drag on. I shall not call special branch reports in argument. We have only to read Republican News to see how the interests of our enemies—the enemies of every policeman in Northern Ireland, Ministers and every Member of Parliament but one, who does not take his seat—are being served and ours are not by this dispute. The sooner we can bring it to an end, the better.
I do not want to go into great detail over the background to this on this side of the water or in Northern Ireland. It was clearly envisaged that the Police Federation would be largely concerned with matters of pay, allowances and related conditions of service, and would act in these matters through negotiating and consultative machinery. Although there have been changes over the years in this machinery, which I acknowledge, its primary function in Northern Ireland and in the rest of the United Kingdom remains that of representing federation members in matters affecting police welfare and efficiency. That is clearly set out in the Police Act (Northern Ireland) 1970, and the regulations of 1971 make that quite explicit.
Quite contrary to what my hon. Friend has been expounding, the right of the Police Federation to represent its members in matters concerning their welfare and efficiency is not at issue here. Its representative position is enshrined in law and it is underscored by the existence of comprehensive arrangements, of a formal and informal character, for consultations and negotiations within the RUC and at national level on matters affecting the welfare and efficiency of its members.
The issue, as I have tried to say, is the extent to which the freedom of the Police Association and its constituent members to make public statements should properly be circumscribed to avoid impinging on matters of force operational policy. Those are clearly outwith the scope of its statutory representative role.
Nobody is trying to gag the Police Federation. That is an emotive, divisive and, I believe, even unjustified allegation. The chief constable's decision to cancel regulation 35 of section 22 of the RUC code was not intended to be conclusive. It has been made clear to the Police Association, and to the federation in particular, that this was a temporary suspension of part of the code while consideration was being given to an amending regulation clarifying these matters on which the Police Association, and not just the federation, could properly represent its members.
The RUC is a disciplined service. It has to be under the direction and control of the chief constable. This involves

a hierarchy, a tradition of obedience to orders, and the control by senior officers of operational matters. It cannot be otherwise. It must be for the chief constable to determine whether public statements made by any member of the force would be at odds with his operational responsibilities and control. Of course it is important that the line should be drawn as clearly and fairly as possible.
If I may say so, over the past weeks—I say this carefully to my hon. Friend—no effort has been spared to find a mutually acceptable solution. I want to pay a very warm tribute to the Police Authority for Northern Ireland, and especially its chairman, Sir Myles Humphreys, for the efforts which they have put in to conciliate in this matter. They were concerned to have this unfortunate episode resolved quickly and in the best interests of all the members of the police force. They have sought to encourage everybody to go down this road, and I am disappointed that their effort has not been better rewarded.
The Police Authority, I understand, has devised a formula which would have given all parties an opportunity to reassess their respective positions without any sacrifice of principle as an interim measure while discussions went on to see whether this could be resolved round the table. It is not for me to disclose details of the proposal at this stage. The last thing I want to do is in any way to prejudice any further discussions which may take place. However, I think it is only fair to point out that three of the four parties—the chief constable, the Association of Chief Police Officers and the Superintendents' Association—agreed this proposal. Only the federation has rejected it.
I very much hope that, when this debate is out of the way, we can again get round the table. The Police Authority and Sir Myles Humphreys have made it clear that they wish to be able to arbitrate in this matter and to provide a forum within which discussions can take place to resolve the problem. It serves nobody's interests that it should drag on. The overriding priority for any of us who have any concern with the RUC in Northern Ireland must be the defeat of terrorism. We have provided the manpower, the resources and the equipment; and policemen are providing the skill, the commitment and dedication and, indeed, the lives to defeat that terrorism. I know as well as my hon. Friend does of the loss of life and the injuries which have been endured by the RUC in its efforts to defeat terrorism. The people of Northern Ireland recognise those qualities in their police force. They know that the police have endured the most vicious campaign of terrorist assassination. They have unparalleled policing responsibilities and the difficulties associated with those responsibilities.
Let us, for heaven's sake, after this debate is over, get all the parties involved in this unfortunate dispute around a table and see that we can resolve it so that it does no long-term damage to a force of which the House has every right to be proud, as does every member of it. The dispute must and can be resolved. The door to the solution is open, if only people will now get together with the Police Authority under the chairmanship of Sir Myles Humphreys to find a way forward.

Question put and agreed to.

Adjourned accordingly at fifteen minutes to Eleven o' clock.